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How Can My Business Qualify for a Business Owner's Policy?

Many small businesses search for a way to save money on insurance, as they believe that they require less than smaller businesses. While this may be true as a general rule, it is still important for small businesses to find the coverage they need at a price they can afford.

A business owners policy is business insurance specifically created to cover small businesses in low risk industries with reliable commercial insurance. Not all businesses can qualify for business insurance, however.

Size and Industry Qualifications

Only businesses of a certain size and within a certain industry will qualify for business insurance. The size category of your business can vary depending on your industry, however. For example, one industry may consider a business with 100 employees may be considered a small business while another industry may consider a business with 1,000 as a small business.

Size can also be determined based on your business’ annual income. If a business that is small employee-wise but has a substantial annual income, they may or may no qualify for a business owners policy.

Be sure to check with your insurance agent and industry to evaluate size evaluations.

When it comes to industry, only businesses in low risk industries may qualify for a business owners policy. A low risk industry is one that does not present as high a risk of an accident or lawsuit as other industries. Examples of low risk industries include:

  • Direct Sales​

  • Senior care​

  • Tutoring​

  • Consulting​

  • Copywriting​

  • Service businesses​

What Do You Need to Get a Business Owners Policy?

Once you are certain that your business qualifies for a business owners policy, you can start purchasing insurance. You must be able to provide the appropriate information to your potential insurer in order to purchase this insurance, including:

  • Location​

  • Industry​

  • Size of the business​

  • Annual income​

  • Personal information of the insured (name, DOB, credit score, etc.)​

  • Name of the business​

  • Desired coverage limits​

Every BOP is different depending on your business and its insurance needs, so speak with an insurance agent about what you need to insure your business.

Getting Insured Once You Qualify

Say you are qualified for a business owners policy and have the relevant information ready. What now?

First, compare quotes from multiple insurers. Comparing insurance providers and their prices can help you find the policy you want at a reasonable price. It can also help you figure out how much and what type of insurance your business needs.

Knowing what a BOP covers is crucial for choosing the right policy. For example, a basic BOP includes two basic coverages:

  • General Liability: General liability insurance covers claims against the business concerning bodily injury, property damage and personal or advertising injury. If a guest is injured in your restaurant, for example, general liability insurance can help with their medical bills as well as protect you from a potential lawsuit. Personal and advertising injury refers to claims regarding libel, slander, wrongful firing or hiring, theft of an advertising idea, copyright infringement and more.​

  • Commercial Property Insurance: Commercial property insurance covers the physical property owned or borrowed by a business for work purposes. This insurance can cover the physical location (such as a store or office) and its contents in case of damage or destruction caused by fire, wind, hail, lightning, smoke, theft, vandalism and more.​

Additional coverages are available, as well, depending on your business’ insurance coverage needs. Optional coverages you may consider adding to a BOP include:

  • Professional Liability: Professional liability insurance covers claims against the business concerning professional negligence. If one of your business’ employees makes a mistake that causes a client to lose money, this insurance can help pay for the damages and protect your business against a related lawsuit.​

  • Umbrella Liability: Umbrella liability insurance serves to fill in the gaps left by your other liability coverages. If a claim exceeds the limits on your general liability insurance, for example, umbrella liability insurance can step in to cover the remaining expenses.​

  • Directors and Officers Insurance: Directors and officers insurance protects your business’ key employees in case of claims regarding their activity under your business, such as fraud or misrepresentation. This insurance often comes with Employment Practices Liability (EPLI), which covers claims concerning discrimination, sexual harassment, mismanagement of employee benefits, etc.​

  • Equipment Breakdown Insurance: Equipment breakdown insurance covers the important equipment of your business in case it suddenly breaks down due to an incident. This can cover repairs and replacements, including rush repairs.​

  • Commercial Auto Insurance: Commercial auto insurance provides coverage for vehicles owned or used by your business for work purposes. This insurance can cover the physical vehicle as well as the driver, passengers and others on the road.​

If you have any questions about how to qualify for a business owners policy or what coverage you should have, call Florida Best Quote Insurance at 727-755-0072.

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