BOP Coverage

What kind of insurance is right for your business? Image via Grand Velas Riviera Maya on Flickr

Business owner’s policies, which are also called BOPs, can be a great fit to cover the insurance needs of many small businesses. This type of policy combines commercial general liability coverage and property coverage into a single packaged product that is generally more affordable than purchasing these coverage’s as separate policies.  Small businesses that are in the market for insurance coverage should look at whether there is a BOP available that meets their needs.

Here are 7 things business owners need to know about BOP coverage.

1.     Packaged Coverage Can Save You Money

By combining several standard coverage’s required by small businesses into a packaged product, insurers can offer that coverage at a lower price.  As long as the limits and coverage’s offered in a specific insurer’s BOP product meet your needs, this can make getting the insurance your company needs at a price that fits within your budget.

2.     Provides Business Interruption Protection

The one coverage that is frequently included in a BOP package is business continuity coverage.  This type of insurance is often overlooked but it is one of the most important kinds of insurance for small business owners.  Business interruption coverage pays you a specific amount if your business cannot be operated which can make the difference between being able to rebuild after a disaster and having to file bankruptcy.

3.     Often Excludes Professional Liability Coverage

Although BOP coverage generally provides the kinds of insurance small businesses need, one area that is not usually included isprofessional liability coverage.  This means that any business that has professional liability exposure will need to purchase that coverage in addition to BOP.

4.     Tailored to Small Businesses

BOP policies are generally only available to companies that have less than 100 employees and bring in less than $1M in annual revenue.  If your company is larger than that it may not qualify for BOP coverage and buying the specific individual policies your company needs will be more cost effective.

5.     BOP Property Coverage Will Pay to Replace Property

Most BOPs provide protection against the loss or damage of property and will cover the cost of replacing the business property.  This is an important detail to confirm with your insurance agent as the difference between replacement value and actual value can be significant.  Replacement value ensures you will have the resources to replace any lost or damaged property.

6.     Offers Protection Against Libel, Slander, and False Advertising

BOP coverage will protect your business against claims of libelslander, and false advertising in addition to shielding the business from liability for bodily injury and property damage.  This can not only save the company money in the event there is a groundless claim filed, but can also save the company in the event there is a successful claim.

7.     Lower Premium Usually Means Less Flexibility

One thing many business owners do not like about BOP insurance is the lack of flexibility these kinds of policies provide.  Business owner’s need to realize that there is a trade-off when they select BOP coverage.  Because the product is standardized and therefore easier for the company to sell and service, it is offered at a lower cost.  However, in order to maintain that standardization, BOPs don’t usually allow for any customizations or deviations from the base product.  If the BOP you are looking at doesn’t provide exactly what you need, you may need to purchase additional coverage which must be factored into your overall cost/benefit analysis.

A business owner’s policy (BOP) might be the perfect fit for your small business insurance needs.  Make sure you understand exactly what is and what is not covered and if needed, secure additional coverage to fill in any gaps.  By leveraging the cost savings provided by BOP coverage, businesses can ensure they have the protection they need at a price they can afford.

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Insurance Mistakes

What mistakes might you be making with your insurance policies? Image via cybrarian77 on Flickr

When you are just starting out, there are so many new things you have to handle, things that your parents have always taken care of for you.  You may be moving into your first apartment, starting your first job, buying your first house, or leasing a new car.  It’s normal to experience a few growing pains as you make missteps and mistakes but some mistakes, the ones with a dollar sign attached, can be more painful than others.  One of the most common mistakes young adults make is not having insurance to protect the life they are building.  Insurance may seem like a luxury or like something you will worry about when you are older, but it is one of the most important things you can do now to protect yourself now and in the future.  

Here are 4 of the most common insurance mistakes young adults make.

1.    Not Having Insurance

The biggest mistake people in their 20’s can make is not having insurance.  If you live in an apartment and own anything you didn’t buy at a yard sale, you need a renter’s insurance policy.  If you drive a car, you need an auto insurance policy that covers liability and uninsured/underinsured motorists at a minimum.  If you don’t have a trust fund, you need personal disability coverage that provides income if you lose your ability to work.

2.  Not Having the Right Insurance

Another big mistake young people make is not having the right insurance.  You may have auto coverage that doesn’t protect you from an uninsured/underinsured motorist.  You might have life insurance but not disability insurance, even though you are more likely at this age to experience a temporary disability than you are to die.  Having the right insurance to protect yourself is one of the most important things you can do to protect your financial future.

3.    Not Having the Right Amount of Insurance

It is great if you have insurance, but if you don’t have the right amount, you may still find yourself in financial freefall.  For example, look at the limits on the liability coverage provided with your auto policy.  Now imagine that you are in an accident deemed to be your fault and the person in the other car dies.  Will the upper limit on your liability policy be enough to pay for a wrongful death lawsuit?  If not, your wages for the rest of your life can be garnished to pay for that one accident.  This is why having the right amount of insurance matters as much when you are 20 as it does when you are 40 with a family and a house.

4.    Not Shopping for Their Own Policies

Another common mistake people make when they are just starting out is to buy the same policies that their parents have from the same companies that their parents use.  Regardless of how great the company is or how good they have been to your family over the years, it is always a good idea to shop around for your own policies.  Some companies offer better rates for newer drivers or provide more comprehensive rental policies at more reasonable prices.  Make sure the insurance you pay for is meeting your needs and that you are getting the best possible price in the process.

One of the most challenging things about moving out and moving up in the world is avoiding the most common mistakes.  Understanding your individual insurance needs and purchasing the right policies with the write amount of coverage allows you to protect your future while you work to build it.

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