Most business owners are busy enough to appreciate anything that can help them simplify and streamline their operations. That’s why many enroll in a Business Owners Policy (BOP): It knocks out several important forms of commercial insurance in one convenient bundle.
But the landscape of small business insurance is ever-evolving, and BOPs are no different. It behooves entrepreneurs running SMBs to keep an eye on what’s happening now—and what the future holds—so they can ensure they’re maintaining the best coverage for their needs.
Here’s what SMBs should know about BOPs, now and in the future.
What Does a BOP Cover?
As it stands, BOPs bundle general liability coverage and property protection into one policy. According to the Insurance Information Institute, most BOPs include:
-Property insurance (both buildings and contents inside those structures)
-Business interruption insurance (covers the loss of income after a disaster and/or the expense of relocating during the downtime)
-Liability protection (harm your company causes to others, whether due to property damage or bodily injury)
It’s important to note that BOPs are not one-size-fits-all, and a standard BOP isn’t always enough for a given business. In the future, these policies may trend even more toward adding extension endorsements on top of standard coverage, as Independent Agent writes. For example, an increasing number of small- and medium-sized businesses may require additional coverage for electronic systems.
Business Interruption Coverage
Some BOPs already offer business interruption coverage, true. But more and more companies are starting to realize just how detrimental the downtime after a disaster can be. It seems like every other day we’re hearing about a severe weather incident on the news—and science shows the frequency of these events is increasing. What happens if a hailstorm damages your roof, letting gallons of rainwater inside overnight? Ditto for lightning, fire, wind, etc.
The future will likely involve more SMBs opting into business interruption coverage, which helps pay bills and keep the company afloat in the aftermath of a covered catastrophe. Businesses need to understand the risks and ensure that their policy contains a degree of coverage they can live with—and then design their policy to fulfill these needs before they actually need to make a claim.
Technology is pushing the limits on what businesses can accomplish. Exciting! However, hackers are making the same leaps and bounds in their capabilities. SMBs can’t afford to automatically assume that their BOP covers electronic incidents. If you use a cloud-based server, what happens if it goes down or suffers a data breach? Companies have a few options here: See if their existing insurance providers will provide an extension for cyber protection, find a new insurer who will and/or layer cyber insurance on top of existing coverage.
BOPs are important (and handy) as far as small business insurance goes. But it pays to take a second look at your policy to make sure it’s serving you now and as your operations keep growing. Want to investigate all your options? Visit CoverHound and get a quote today.