Almost every business owner has to get some kind of insurance, but the type of policy you need depends on the nature of your company. For many people, a business owner’s policy is a great choice because it offers comprehensive coverage. A BOP in California might include building and contents insurance, liability insurance, commercial auto insurance, employment practices liability coverage, and business crime insurance.
While these categories tend to be the same for most businesses, the policy can be tailored to your unique needs. For example, people who need to protect a building they own should get Coverage A, but business owners who rent don’t necessarily need this. Today, we’ll have a closer look at what Coverages A and B are and what else is protected by a business owner’s policy.
What Is Covered Under Coverage A of a Business Owners Policy?
Coverage A refers to the protection of a building. It includes the structures and properties you declared when you signed up for your policy. In addition to the main house or unit, you might have to insure add-on structures, both inside and outside the property. What’s more, you might want to protect furniture and fixtures and personal property that you have rented out to someone else or anything that is still under construction.
Business owners who are currently renting their premises don’t need Coverage A. Instead, they should look into getting Coverage B.
What About Coverage B?
Unlike Coverage A, this kind of insurance is designed for business owners who would like to protect their furniture, fixtures, and personal property, either in their own building or in a unit they are renting. Often, coverage B also protects the property of other people while they are at your business, but you should check the details of your policy to see what is included and what isn’t.
When you sign up, you have to declare all your items and determine how much they are worth. Depending on your policy, you might receive more money over time due to inflation or seasonal variations. However, you should keep in mind that there is a deductible, so your insurance won’t cover all the damage. There might also be some excluded items, such as automobiles.
What Else Is Covered Apart from Buildings and Business Property?
A good BOP in California is comprehensive and versatile. Aside from insuring your buildings, equipment, and other property, it almost always includes liability coverage, which protects you from lawsuits due to personal injuries or property damage. This is a crucial type of insurance for anyone who interacts with customers in person, either at their business location or at the customer’s home.
You can also get other types of policies, including commercial auto insurance, cyber liability coverage, and business crime insurance. If you employ other people to work for you, you should consider taking out employment practices liability insurance, a type of policy that pays out if an employee or applicant sues you due to discrimination or similar issues.
Liability
While getting Coverage A or Coverage B is important, liability insurance is even more crucial because the potential damage is unlimited. If a customer slips and falls or otherwise injures themselves while at your business, they might file a lawsuit. This could cost you a six or seven-figure amount, especially if the customer has significant injuries that prevent them from going back to work or taking part in their regular daily activities.
A liability policy protects you from this kind of lawsuit. If you get sued, your insurance will pay for the compensation as well as the legal fees associated with your case. Although the majority of businesses never experience this problem, it’s important not to skip liability insurance because the potential consequences could ruin your company’s finances and even cause you to go bankrupt.
Commercial Autos
Many firms rely on their vehicles for day-to-day operations. If you have to visit customers at their homes, transport heavy materials from one place to the other, or transport people, it’s likely that you need several cars, vans, or trucks to run your business. In this case, insuring your vehicles could be a good idea because it reduces your unexpected expenses and allows you to get back on the road quickly after an incident.
Commercial auto insurance covers the damage to your vehicles if they are involved in a crash or otherwise break down on the road. Before selecting this kind of policy, you should speak to your insurance agent. If you have bought a brand-new vehicle, it might still be insured by the manufacturer, but if you’ve had it longer than three years, you might no longer be covered.
Business Interruption
When something goes wrong with your building or your equipment, you have to pay to replace the damaged structures. However, that’s not the only reason why you might have a loss. In addition to the material costs you have to cover, you will also lose income because the running of your business is disrupted. Depending on the type of company you run, even a few days of interruption can cause significant costs.
If you believe that any disruption to your business would lead to large losses, you should discuss business interruption insurance with your agent. This policy pays you when you’ve lost income due to an unexpected event. As a result, you will be in the same economic position you were in before the event occurred, and you don’t have to worry about hefty losses.
Employment Practices Liability Coverage
Nowadays, the rules about how to treat applicants and employees are very strict, and businesses can get sued if they disregard them. For example, you’re not allowed to discriminate against anyone based on their gender, race, disability, nationality, or sexual orientation. If you don’t hire someone, pay someone less, or treat them differently for one of these reasons, they can file a lawsuit against you.
Similarly, you must provide your employees with good working conditions. There is a limit to how many hours they can work at a time, and there are regulations regarding the rest breaks they are allowed to take. Although most business owners are considerate employers, mistakes occasionally happen. By getting employment practices liability coverage, you can protect your companies from lawsuits by employees.
Cyber Liability
Cybercrime has been on the rise for decades. The strategies cyber criminals use change every year, so security software that worked well a few months ago might be completely out-of-date today. Even if you set up all the right protections and update your security system on a regular basis, there is no guarantee that you won’t be targeted.
For this reason, cyber liability insurance is key for anyone who keeps customers’ or employees’ sensitive data on electronic devices. If this data gets stolen or compromised, you might be sued, since you put other people’s personal information at risk. By getting insurance, you can avoid a lawsuit that could cost you millions of dollars and ruin your company’s financial future.
Business Crime
Business crime can come in many forms. A customer or employee might steal from you, they might ruin some of your products, or someone might take on your identity and engage in illegal activities. Another common issue is copyright infringement. If someone copies your product or uses your business name without permission, they might also be committing a crime.
The best way to protect yourself against business crime is to make it hard for people to steal from you or gain access to your sensitive information. However, you should also have a backup plan in the form of an insurance policy. That way, you can go about your day without constantly worrying that someone will steal or destroy your assets.
How Can I Find a Good BOP in California?
Although you can take out the above-named policies separately, getting business owners’ insurance is often the easiest and most cost-effective solution. To get started, you should speak to a local insurance agent, who can analyze your company’s needs and let you know which types of insurance you need to consider.
Once you’ve chosen the coverage you need, the agent can find quotes from various insurance companies in your area. Your professional will go through the fine print of each one with you, so you can decide which policy offers the best value for the money spent. Then, they can help you with the paperwork and get you set up. Every year, your insurance agent can check that your policy still suits your needs and, if not, suggest a different insurance company.
Taking out a BOP in California is a great way of protecting your business from various types of unexpected expenses. If you own or rent out a building, you should consider getting Coverage A, which protects all your structures and the content of your rental units. Get in touch with us at ISU Armac and ask to speak to an insurance agent. We will be happy to help you find and customize a business owner’s insurance policy.
