Starting a small business can be incredibly exciting and fulfilling. You finally get to turn your deepest passions into a product or service that can help others. It’s probably been your lifetime goal to get your business off the ground, and you know you’ve got to make the most of it. A huge part of starting a successful small business is protecting your company from any unexpected hardships that you might face. From natural disasters that come out of nowhere to unfortunate third-party lawsuits, you’ve got to expect the unexpected as a business owner. That’s why having the proper insurance for your business is so important. By ensuring that you have the right coverage for any obstacle you and your business might face, you guarantee the stability of your company’s financial future so it can prosper for years to come.
If you’re new to small business insurance, it’s best to investigate the cost and coverage of a business owner’s policy, a packaged form of insurance plan that includes various types of coverage.
What is a Business Owners Policy?
A business owner’s policy is a form of insurance that can help protect a business in various ways. When you start a business, you want to ensure that you have coverage for the physical location where your business will be done, the employees who work for you, and the customers to you provide services or goods. Without this coverage, you can end up responsible for footing the bill for any unexpected damages, injuries, or lawsuits that come your way. A comprehensive business owner’s policy gives you all the coverage you need to keep your business afloat and your finances intact.
Who Benefits From a Business Owners Policy?
Business owners’ policies are especially beneficial to small business owners as they provide the majority of standard coverages that any business needs. Typically, the determining factors of what types of businesses are eligible for a standard business owner’s policy are business size, location, and level of business risk. For instance, a smaller business located in a rural area that provides low-risk services (like an accounting firm) would probably get a better deal when choosing a business owners policy than a larger company located in a highly populated urban area that provides a higher-risk service (like a busy hotel). Large corporations are typically not eligible for a business owner’s policy due to the broad scope of their business operations, many employees, and more complex business risks. As a result, larger companies typically purchase various separate insurance policies to have adequate coverage for all their specific business needs.
Additionally, smaller businesses have less available cash flow than larger companies, meaning that unexpected damage or lawsuits will cause higher financial stress to them. Without the proper insurance coverage, all those repairs and legal fees will have to come out of the pockets of the business owners. As such, a business owner’s policy provides a much-needed safety net for all the possible things that could go wrong.
What is Covered Under a Business Owners Policy?
Three main types of insurance are included in a standard business owners policy:
Commercial Property Insurance
Commercial property insurance comes to the rescue when your business property is damaged or stolen. Commercial property insurance covers the cost of repairs to any commercial property your business owns or rents and the cost of stolen or damaged documents, supplies, and inventory within the property.
General Liability Insurance
General liability insurance covers the cost of legal defense fees that may be required if a lawsuit is brought against your company by a third party. Third-party lawsuits commonly happen when a customer is injured on-site at a business or if someone suffers an injury while using a product provided by a business. Lawsuits can be incredibly costly, but with general liability insurance, you can avoid legal fees and keep your business intact.
Business Interruption Insurance
This insurance helps cover the costs of running your business if you temporarily have to close due to damage or theft. This way, you can continue to pay your business property’s rent and your employees while you get your business back on its feet.
In Conclusion
A business owner’s policy is essential for any small business owner as it protects you from many financial hardships your business could suffer. If you’re looking to start a company of your own, focus on finding the right business owner’s policy for you, so you can make your business dreams a reality.
