Many business owners look for ways to save money on necessary insurance coverages. A good way to do this is by bundling certain coverages. A business owners policy bundles property coverages and liability coverages into one package for businesses. It covers:
- Property damage: Property damage references buildings and items owned by the business and covers against perils such as fire, hail, windstorms, lightning, theft and vandalism.
- Liability coverage: Liability coverage protects the business if someone is injured or their property is damaged due to the company’s every-day operations.
- Business interruption insurance: Some disasters make it impossible to continue working. If such an accident occurs, business interruption insurance pays for the lost income that would have been earned during the time the business is inoperable.
A business owners policy does not cover workers’ compensation, negligent acts or commercial auto insurance. To cover claims due to negligent acts committed by your business or employees, you will need professional liability insurance. It also doesn’t cover claims that occur between employees or claims made against the company by employees.
Why Do I Need a Business Owners Policy?
Small businesses usually purchase a business owners policy because it contains necessary coverage in a way that saves money. Liability insurance is crucial for businesses. Say you run a restaurant and a guest slips and falls. They twist their ankle and want to sue for the injury. Liability insurance helps cover the medical expense as well as legal fees should the guest sue. Property coverage is equally important, as it protects the company’s physical assets. Warehouses are often at the highest risk of damages, but every structure may fall victim to theft, vandalism or the elements.
How Much Does a Business Owners Policy Cost?
The cost of a business owners policy depends on several factors, including the industry and size of the business. In general, a small business may pay $1,200 a year for a business owners policy. On its own, the median cost of general liability is around $500 a year. Property insurance for a small business could be anywhere between $1,000-$3,000 a year. By bundling these policies, you can save between $500-$2,500 a year on crucial insurance.
A business owners policy is a good start to insurance for small businesses looking for coverage. Keep in mind that different policies have different coverage rates and speak with an insurance agent about your business’ insurance needs.
Also Read: 5 Tips For Buying Business Insurance