Business Insurance Basics
The BOP combines coverage for all property and liability insurance risks as well as many other coverages into one package policy suitable for most small businesses. The BOP is an efficient way to provide the commercial insurance coverage that most small businesses need. The term “BOP” specifically refers to insurance policy language developed by experts at ISO. ISO is a leading source of information about property/casualty insurance risk in a broad spectrum of commercial and personal lines of insurance.
The BOP includes business income insurance, sometimes called business interruption insurance. This compensates a business owner for income lost following a disaster. Disasters typically disrupt operations and may force a business to abandon the location. Business income insurance also covers the extra expense that may be incurred if a business must operate out of a temporary location.
To cover specific risks related to a business, a variety of additional coverages may be added to the basic BOP. For example, if a business has an outdoor sign, the BOP doesn’t cover it unless coverage is specifically added for an additional premium. If a business functions as a restaurant, the owner can add coverage for food spoilage and extra expenses in the event the ability of the business has be hindered.
Only small- to medium-sized businesses that meet certain criteria are eligible for a BOP. MJM Insurance® of St Louis City agents will look at the size of the premises, the required limits of liability, the type of business and the extent of offsite activity. Premiums for BOP policies are based on those factors plus business location, financial stability, building construction, security features and fire hazards.
Most small businesses need to purchase at least the following four types of insurance.
Property insurance will reimburse a business if the property used in the business is lost or damaged as the result of various types of common perils, such as fire or theft. Property insurance covers the building or structure,personal property, like office furnishings, inventory, computers and other items that a business needs to operate at full capacity. MJM Insurance® Of St Louis City can help business owners determine the best policy that meets their needs. For example, property insurance may include coverage for equipment breakdown, removal of debris after a fire or other destructive event, some types of water damage and other losses.
Business Liability Insurance
Business Liability Insurance covers a business owner if the business is sued. Customers may claim the business caused them harm as the result of a defective product, or bad service that resulted in property damages. Other reasons a business may be sued is when a claimant may allege that the business created a hazardous environment. Business Liability insurance pays damages for which the business is found liable, up to the policy limits, medical bills, as well as attorneys’ fees and expenses.
Business Auto Insurance
A business auto policy provides auto insurance coverage only for autos owned by a business. The insurance pays any costs to third parties resulting from bodily injury or property damage for which the business is legally liable, up to the policy limits.
Workers Compensation Insurance
Workers’ compensation is a state-mandated, “no-fault” insurance system that pays benefits to workers injured on the job to cover medical care, part of lost wages and permanent disability. In return, employers receive immunity from civil lawsuits by employees over such workplace injuries. As a general rule, businesses with five or more employees must be covered. Contractors are excluded from this rule and must have workers compensation insurance with just 1 employee. It is important to note that Missouri law does not distinguish between employees of different employment statuses. The statutory definition of “employee” includes both full- and part-time employees, seasonal and even temporary employees.
Other Types of Business Coverages
Errors and Omissions Insurance/Professional Liability
Errors and Omissions Insurance is most common for businesses that offer advisory services, rather than a product. Examples of these type of businesses are CPAs, Attorneys, those providing physical care, can all lead to being sued by customers, clients or patients claiming that the business’s failure to perform a job properly has caused injury. Errors and omissions or professional liability insurance covers these situations. The policy will pay any judgment for which the insured is legally liable, up to the policy limit. It also covers legal expenses when there has been no wrongdoing.
Employment Practices Liability Insurance
Employment practices liability insurance covers damages for which an employer is legally liable such as violating an employee’s civil or other legal rights. In addition to paying a judgment for which the insured is liable, it also covers legal expenses when there has been no wrongdoing.
Directors and officers liability insurance protects directors and officers of corporations or not-for-profit organizations if there is a lawsuit claiming they managed the business or organization without proper regard for the rights of others. The policy will pay any judgment for which the insured is legally liable, up to the policy limit. It also covers legal expenses when there has been no wrongdoing.
Key Employee Insurance
Life or disability income insurance can compensate a business when certain key employees die or become disabled. These coverages cushion some of the adverse financial impact that results from losing a key employee’s participation.
A Business Umbrella Insurance policy protects you in a claim when your general business liability limits are exhausted, and you are faced with a lawsuit and potentially millions of dollars in liability exposure. As the name implies, an umbrella liability policy provides coverage over and above a business’s other liability coverages. It is designed to protect against unusually high losses. If a company has employment practices liability insurance, directors and officers liability, or other types of liability insurance, the umbrella could provide protection beyond those policy limits as well.
Please give us a call at (314) 645-2100 and have your insurance policy information ready. Our Commercial Insurance Specialist will obtain the information to begin working on your no obligation risk assessment and quote.