Business owners policies are typically designed to meet the insurance needs of small businesses, and many small businesses can get all or most of the coverages they need through one of these policies. BOPs aren’t a one-size-fits-all solution for every business, though. A stand-alone policy, business owners policy or commercial package policy might be right for your business.
Should My Business Get a Business Owners Policy or Another Commercial Insurance Policy?
Solopreneur of At-Home Business
If you’re self-employed and work from home, you might have minimal commercial insurance needs. Of course, your business venture could have significant needs that require multiple coverages. Some at-home businesses, however, have little risk exposure and require just one coverage.
As long as a single policy is able to provide all of the coverage you want and need, a stand-alone option is likely a good choice. If you don’t need additional coverages, why pay for extra protections that a package policy would offer but are of little use?
Of course, you should make sure that a stand-alone policy truly does provide all the protection needed before relying on this type of policy. An agent who’s helped other self-employed solopreneurs can help determine whether a stand-alone policy offers sufficient coverage.
Owner of Small Business with General Needs
If you run a small business that has fairly typical insurance needs, a business owners policy is probably well-suited for your business’ needs. These policies combine several individual coverages together, and the coverages they include are selected with small businesses in mind.
In a BOP, you might find the following protections:
There could be other coverages as well, and you can usually select from these to create a policy that’s customized for your business.
While it’s possible to purchase these coverages through multiples stand-alone policies, doing so through a BOP that packages the coverages together usually results in significant premium savings.
Owner of a Small Business with Specialized Needs
If your small business has specialized insurance needs, a BOP might not offer all of the necessary protections.
Sometimes when this is the case, a single stand-alone policy can sufficiently complement a BOP’s protections. For example, many businesses get a BOP and a separate workers compensation insurance policy. (Workers compensation often isn’t included in BOPs.)
In other situations, a commercial package policy makes more sense. This type of package policy usually offers broader coverages and be customized more than BOPs. In addition to the protections found in BOPs, CPPs might offer:
Many more insurance options
These are coverages that not every small business needs, but a number do, which is why they normally aren’t included in BOPs but can be acquired through most CPPs.
Owner of a Large Business
Should your business grow beyond the size of a traditional small business, it’ll probably need at least some of the protections offered through CPPs. By the time a business has multiple locations or lots of employees, it’s risk exposure has usually grown beyond what BOPs are meant to protect against.
Ask an Agent About a Business Owners Policy
While these guidelines are broadly true, every business should have its insurance needs individually assessed to determine which of these policy options is best.
For help assessing your business’ risk exposure and insurance needs, talk with an independent agent who specializes in business owners policies and other commercial insurance solutions. An agent who’s familiar with the details of all these different options will be able to give you good advice on whether a business owners policy or other option is better for your business.