Why Every Small Business Needs a BOP

Business owners know that success doesn’t come easy. According to Investopedia, data from the U.S. Bureau of Labor Statistics shows that about 20% of new businesses fail in the first two years, and only a little over half make it past the five-year anniversary.

A lot of things can put your business in the red, and it’s not always about a lack of customers. No matter how excellent your market research has been, and no matter how hard you work, things can go wrong – things like natural disasters, property damage, and lawsuits. Without the financial protection that an insurance policy can offer, recovery isn’t always possible. That’s why every business needs a Business Owners Policy.

What Is a Business Owners Policy?

A Business Owners Policy, often abbreviated as BOP, is a bundled insurance product designed to meet the needs of the typical small business owner. Because coverage is bundled, a BOP can cost much less than the coverages would normally cost if they were purchased separately.

Policies can vary, but the typical BOP includes the following:

• Liability Insurance. This coverage protects the business in case business operations result in losses to a third party, including bodily injury or property damage.
• Property Insurance. This coverage protects the business in the event of damage to property owned or rented by the company, including both building structures and contents.
• Business Interruption. This coverage protects the business in the event of business disruption and loss of income caused by a covered loss.

Why Is BOP Coverage So Important?

Could your business survive the following scenarios?

• A fire destroys your building and everything inside.
• A customer is injured in your store and decides to sue you for the medical costs.
• A natural disaster forces your business to close for several weeks. Until you can reopen, you’re not bringing in an income, but your bills don’t stop.

If you have coverage through a BOP policy, you can file a claim and get back to business. If you don’t have coverage, your recovery might not be so easy.

Is a BOP the Only Policy a Business Owner Needs?

A BOP offers extremely important coverage that shields business owners from many of the most common risks. However, it is not necessarily the only coverage you need.

As previously stated, policies can vary. It’s important to read your policy carefully to understand what is covered and what is not covered.

Depending on your business operations and risks, additional coverage types may be needed. It may be possible to add some of these coverages to your BOP as part of the bundle. Otherwise, you may need to purchase a separate policy for coverage.

Other common coverage types to consider include the following:

• Commercial Auto Insurance
• Cyber Insurance
• Professional Liability Insurance/Errors and Omissions Insurance
• Employment Practices Liability Insurance
• Workers’ Compensation Insurance
• Employee Benefits

Is Your Business at Risk?

You’ve worked hard to build your business. A BOP is a cost-effective way of getting the most essential insurance coverage you need to protect it.

Want to learn more? Contact Heffernan Insurance Brokers for guidance.