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Insurance is critical for all business owners. The purpose of insurance for the small business is to provide assistance in the event of a loss in order for the business to continue its daily operations with as little disruption as possible. Without the proper protection, property or liability losses can put the entire organization out of business.
The majority of small business owners purchase a Property & Liability policy, which is more commonly known as a Business Owners Policy (BOP). It is a package policy because it "packages" both property insurance with liability insurance under one policy for the business.
A BOP includes coverage for any property that the business owns, leases or rents. If the business owns a building from which the business operates, the building can be covered. Everything inside the building will be covered such as office equipment critical to the daily operations, including computers, printers, fax machines and telephones. Furniture in the building is covered. Any inventory located or stored in the building can be covered. Think about the significant amount of money a company invests in inventory and raw material; if this inventory is destroyed in a fire, its value will be covered. Machinery is covered. Often times machinery is a significant part of a company’s total assets. If the machinery is destroyed in a fire, the business will be able to replace it with new.
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The liability portion of the policy provides coverage when something goes wrong and the business is sued. A customer who comes to the office can slip and fall. A product the business sells can injure a customer. If property of another business or a customer is damaged due to the business’ employees or product, the business may be sued. The liability coverage will provide protection against these events. The policy will also cover the costs of defending the business in litigation.
Several important protections can be added to a BOP. If the business holds customer's personal information it has the potential to mishandle it, leaving the customers vulnerable to identity theft. Cyber Liability coverage can be added to the policy to insure against this scenario.
If the business has employees, it can add coverage to the policy that protects it from employment related lawsuits resulting from alleged acts of discrimination, harassment and wrongful termination. It is not uncommon for a terminated employee to feel wronged and seek out legal counsel in order to potentially sue the company.
If you have questions regarding insurance as it pertains to your particular business, please call us toll free at 1-800-649-3252. Prefer to type versus talk? Click below.
