Your business may be running smoothly. It may be providing employment for other people. Small and medium businesses are subject to the same risks as major corporations. Disasters can strike in many ways; even a minor one could wipe out a lifetime of hard work.
Fortunately, Business Owner's Policy, sometimes called as BOP, can protect you in the event of property damage, business interruption or litigation troubles.
Prior to the 1990’s, what companies had to do was to go out individually to individual insurers and purchase individual policies for each little tiny pieces of the business exposure that was been presented. So you have a property policy from one insurer, you might have a liability policy from another insurer,business income,money in securities, all of these were tiny pieces to be managed effectively. For most business owner’s it was challenging and could be very expensive. And sometimes, owner’s would choose not to carry these coverage because it turns out to be very expensive. Here are 3 critical covers you should consider if you are a responsible business owner.
Property Insurance
Property is typically categorized as real or personal. Real property includes land, structures and permanent fixtures. Personal property includes contents and other mobile equipment. Property risks can be direct or indirect. A standard BOP policy helps protect against a specific list of perils, such as fire, wind, hail, water damage and vandalism.You may be able to work with an insurance broker to identify and reduce certain types of risks to help lower premiums. It is advisable to insure for “replacement value” rather than “actual value”. That way, you might not have to spend extra money to get back to business.
Liability Insurance
Liability is the next large type of risk. Liability insurance is often very important, because it protects a third party from someone’s negligent act. When you buy a car insurance, the only portion of car insurance which is typically required is liability coverage and it is not to protect you or the driver, but to protect the people on the road. Liability insurance is essential if someone were to become injured on your premises, by your employees or by your products. It can help protect medical costs for injured parties or to defend against liability claims.
Business Interruption Insurance
So you run a small business or may be a big business or even a factory, you probably got insurance for property damage, liability coverage and insurer will fix things quickly for you. But if your business is out of action for any period of time, who is going to pay for all your ongoing expenses like wages, rent or supplier costs? Depending on the business conditions, it could take months until you are able to open your doors and start serving customers again. But that would not stop the bills piling up. This is where business interruption can save the day. Designed to cover all the business expenses you incur while you are waiting to get your business humming smoothly again. It can pay staff wages, rent, or even to relocate your business to temporary premises. Your insurance broker can take care of the hard work of figuring out how much income your business has lost as well as dealing with insurance company to make sure you have the funds you need when you need them.