Depending on the size and needs of your business, there are many types of policies available to cover your risks. However, not all businesses qualify for all of the same packages.
The two main packages for businesses are a business owners policy (BOP) and a commercial package policy (CPP). Coverage between these two policies are similar, but there are also stark differences.
What Does a Business Owners Policy Cover?
Business owners policies are geared specifically for small businesses in low-risk industries.
A business owners policy covers:
- Property Coverage: Property coverage provides compensation if the commercial building owned by the business is lost or damaged due to fire, lightning, smoke, theft, vandalism or other covered danger.
- General Liability: General liability provides compensation if a third party is injured or has their property damaged due to every day operations by the business. It can also cover legal fees if the victim decides to sue.
You can add coverages to this policy as well to cover additional property and liability risks.
What Does a Commercial Package Policy Cover?
Commercial package policies cover large businesses in high-risk industries.
A commercial package policy covers both of these coverages but can be expanded. It’s more flexible and can often include:
- Commercial Auto Insurance: Most states require businesses to carry commercial auto insurance. This insurance provides coverage similar to personal auto insurance such as comprehensive, collision, and uninsured/underinsured motorist.
- Business Income Insurance: If an event makes it impossible to continue operating the business, business income insurance can provide compensation for the wages lost while the business is put on hold.
- Equipment Breakdown: Some businesses require expensive equipment. Equipment insurance can help replace broken equipment. This is especially important for restaurants and other businesses that handle produce that need refrigerators and freezers.
- Crime Insurance: Crime insurance protects your company from theft by employees or managers.
- Inland Marine Insurance: Commercial auto insurance typically won’t cover items in transit. Inland marine insurance provides compensation if items or equipment are lost or damaged in transit.
The cost of these policies depends on a number of factors, including the size of the business and the coverage limits. Coverage limits for these policies generally go by millions.
If you are unsure where your business falls when it comes to size, income or risk, be sure to speak with an insurance agent.