Here at Mayville Insurance, we answer lots of questions about insurance for small businesses. Very often, we suggest a package of small business insurance that’s called a business owners policy, or BOP. This product includes the main types of protection that most small companies require simply and cost-effectively. On the other hand, all businesses won’t qualify and might need to purchase their coverage another way. Is your small business eligible for a BOP?
Which Small Businesses Can Buy a Business Owners Policy?
Qualification for a BOP may vary between insurers. In general, insurers limit eligibility to businesses of certain sizes and types. For instance:
- Larger businesses might buy a similar kind of insurance package that’s tailored for them. This is called a commercial package policy, or CPP.
- Businesses that insurers won’t accept because of the nature of their work will purchase the kinds of insurance they need separately.
- Some typical examples of the kinds of businesses that will usually qualify for a BOP with most insurers include hair salons, print shops, and retail stores.
Cafes or fast food restaurants may qualify, depending upon the nature of the cooking they do. Small construction contractors might also qualify. In some cases, eligibility depends upon the size of the building. For example, most insurers restrict apartment or office buildings to less than 100,000 square feet. Similarly, wholesale or manufacturing buildings may qualify if they are less than 35,000 square feet.
The size of the business and the nature of work it does may disqualify some companies from qualifying for a business owners policy. Common examples of these could include auto dealers, movie theaters, banks, and bars.
Will a BOP Provide Adequate Coverage for Eligible Small Businesses?
The exact terms of a BOP will vary by insurer. In addition, many business insurance companies will allow some customization. For example, workers compensation is not generally included; however, some insurers may package it in as well. The two main parts of a BOP usually include commercial property and general liability insurance. The policy may also provide business interruption, electronic data, cyber interruption, and other kinds of coverage.
A BOP gives small businesses a way to acquire their primary kinds of insurance in one package. Generally, insurance companies will offer bundling discounts for these policies as well. The Small Business Administration has advised business owners to perform a risk assessment before buying or changing their business-coverage, but a good insurance agent and company can provide resources to help with that.
This risk assessment will often result in the need to buy some additional kinds of protection that aren’t usually included within a BOP. Common examples of these include professional liability insurance, flood insurance, and health insurance for employees.
Let’s Start With a Risk Assessment for Your Small Business
Here at Mayville Insurance, we know that local business owners need to manage many risks. Depending upon the nature of your own company, your coverage needs could be simple or complex. Contact us today to begin a risk assessment for your own business. After that, we can help you shop for competitive prices from high-quality insurance companies. If you ever do need to make claims against your policy, we will be here to help you with that as well.