This article was written by Mark Atkinson, Wyoming Entrepreneur SBDC Region 1 Director.
Business insurance (commercial insurance) is a protection no business should be without. Like the insurance for your home or car, it provides indemnification should you experience a sudden, unexpected loss. There are a number of types of commercial insurance, including the following:
• A basic policy, business owner’s policy (BOP), described in more detail below.
• E & O insurance (means errors and omissions). This protects you in case a professional error is made and a suit is brought against you.
• Executive Insurance, director's and officer's insurance, which protects executives against charges of fraud and other misdoings. This is a common recruitment tool to attract talented executives; an entirely additional conversation.
• Commercial Auto, which protects your company’s vehicles. People often use their personal vehicles for business purposes. Without this coverage, which is very risky, a claim may be denied by the insurer when a personal vehicle is being used for business activities and a related claim is filed.
• And, others.
Let’s look further into the basic components of a BOP, which may vary from insurer to insurer, but there are some common elements in most basic BOP insurance.
• Property Coverage for a building you either rent or own.
• Premises Liability Coverage protects you if someone is injured at your place of business.
• Business Property Coverage (i.e. equipment and supplies).
• Business Interruption Coverage which pays you to keep operations going should a covered loss or peril shut you down temporarily.
• Signage Coverage which covers the signs at your business.
• Inventory Coverage for theft or other covered losses.
• Liability Coverage for Business Use of Employees’ Cars.
• Employee Dishonesty Coverage.
What a BOP does not cover is professional liability, auto insurance, worker’s compensation or health and disability insurance - separate coverage is needed for these risks. It’s always in your best interest to consult a professional provider to discuss the specifics of your business and related insurance needs.