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What Are the Eligibility Requirements for a Business Owner’s Policy?

If you run a small business and are looking for insurance coverage, you should consider getting a business owner’s policy (BOP). This is an insurance package that comes with both commercial property insurance and general liability insurance.

Because of its relatively low price and wide-ranging coverage, insurance agents usually recommend this policy. However, not all companies will be eligible.

So, what are the eligibility requirements for a business owner’s policy? And is a BOP right for your company? We’re glad you asked.

Keep reading and we will walk you through everything to know!

Is Your Company Eligible for a BOP?

Your company’s eligibility for a BOP will mainly depend on how risky it is to insure your company. Small businesses that are operating in low-risk industries have the best chances of getting approved because there is less likelihood for claims.

If your company meets the following guidelines, it could very well qualify for a BOP.

First, your company must employ less than 100 people and you need to have a small office or a commercial space. You also need to bring in less than $1 million in yearly revenue and you need to have less than one year of business interruption insurance.

What if Your Company Employs More Than 100 People?

If your company employs more than 100 people, then you probably do not meet the business owner’s policy qualifications. Depending on the company’s yearly revenue, you may be able to get approved if your payroll is slightly more than 100.

A lot of companies that employ more than 100 people tend to be considered medium-sized businesses. These kinds of companies would need to buy policies separately.

What Protection Does a BOP Provide?

The leasing company that owns your office space might want to make sure that your company has general liability insurance. You might also have a customer who wants to include liability protection in the terms of a contract.

If your company meets the qualifications for a business owner’s policy then it is a good idea to purchase the policy. Even when it is not required, your company will benefit from the policy’s protection against common business lawsuits and losses.

General Liability Insurance

General liability insurance is going to cover situations like customer property damage, advertising injuries, and customer injuries. It can help small businesses avoid bankruptcy and pay legal fees during a lawsuit.

If you want to rent commercial office space or sign new clients, then you can also benefit from having general liability coverage.

Commercial Property Insurance

Commercial property insurance protects your business property and your place of work. For example, if your office space gets damaged by fire then your commercial property insurance will help you replace damaged furniture, supplies, and equipment.

This kind of insurance coverage will also cover theft of your company’s property.

Why Is a Business Owner’s Policy Important?

It is important to have a BOP because it can save you a lot of money in the long run. If your company needs to file a claim, then insurance is going to help you cover the costs.

Depending on your coverage limits and deductible, a claim that could otherwise cost you thousands of dollars will only cost you a few hundred.

If you don’t have insurance, then you would need to pay for the losses on your own. Having just one expensive claim could put your uninsured company into debt.

If your business meets the requirements for a business owner’s policy then this would be a smart investment for your company’s future.

What Should You Look for in a Business Owner’s Policy?

If your business is eligible for a BOP then you want to make sure that you understand your options and get the proper amount of coverage. If you need to file a claim, then you want to make sure that insurance money is going to cover most of the loss.

Before you get a policy it is important that you consider endorsements and look at your policy limits.

Your business owner’s policy is going to have policy limits. This is the maximum amount of money that your insurance provider will pay for a covered loss.

Most policies have low coverage limits, which is why they are best suited for small businesses. When you purchase a BOP, you get to set the coverage limits.

It is important to make sure that your general liability insurance can cover the cost of a lawsuit, such as court costs and lawyer’s fees. When it comes to commercial property insurance, set the limit to match the total value of your company’s property.

An endorsement is an add-on policy that you can buy to give yourself more coverage for a certain situation. For example, a tech company might benefit from getting cyber liability insurance so that they can protect against data hacks.

Are You Eligible for a Business Owner’s Policy?

Hopefully, after reading the above article, you now have a better idea of how eligible your company is for a business owner’s policy. As we can see, a business owner’s policy can be very helpful for a small business that is looking to protect themselves while saving costs. Of course, it’s important that you speak with your insurance agent to make sure that you know about all of your available options.

Are you interested in acquiring business insurance for your company? If you are, then contact us today and see what we can do for you!