A business owner’s policy provides core coverages that businesses need in one affordable package. This normally includes property, liability, and business interruption insurance.
Even though a BOP offers great coverage, it can’t protect your business fully. Here are 5 things that a BOP doesn’t cover and additional protections you should consider.
Cyber crime is a significant problem. According to the Hiscox Cyber Readiness Report 2021, the average financial cost of cyberattacks for a small US business is $25,612. Almost a quarter of all small businesses suffered at least one attack in the past year.
However, your BOP does not provide cyber liability coverage. Fortunately, you may be able to add a rider to your policy. Insurers also sell standalone polices that can help pay for computer repairs, data loss and recovery, and remediable actions to rectify a data breach.
Every business depends on equipment. This could include a phone system, computers, photocopiers, HVAC, electrical system, machinery, and more.
If your important devices break down, it could bring your operation to a halt. Without insurance coverage, you’ll scramble to repair or replace faulty units. Plus, you’ll lose business income. These costs aren’t typically covered under your BOP.
Equipment breakdown coverage pays for the costs related to the repair or replacement of this equipment. Additionally, it covers property damage caused by the failure. Some policies also cover business income loss.
If your company has boiler and machinery insurance, you will want to upgrade your coverage. Equipment breakdown insurance provides slightly broader coverage and much simpler policy language.
Errors & Omissions
If your company delivers professional services, you probably need errors and omissions coverage. For instance, a financial service advisor, insurance agent, doctor, lawyer, or even a wedding planner could face a lawsuit.
If a client feels your company failed to meet its obligations or you’ve provided them with bad advice that led to a financial loss, they could seek compensation. This expense isn’t covered under your business owner’s policy.
However, errors and omissions insurance will cover the expenses involved in a lawsuit due to professional mistakes. This includes lawyer fees and a court-ordered judgment.
Your BOP definitely does not cover employee injuries. It only covers third-party injuries.
Almost all companies with more than four full or part-time employees are required to purchase workers’ compensation insurance in Rhode Island. If you do not buy it, you could be liable for employee medical expenses, wages, and a settlement if they sue. You will probably receive a stiff fine, too.
A BOP protects most business property, but not your vehicles. Your business needs commercial auto insurance for business-owned vehicles.
If your business rents or leases vehicles, or uses personal vehicles for business purposes, you need hired and non-owned auto insurance. Otherwise, your company could be held liable if a driver’s involved in accident.
If you have questions or concerns regarding your BOP, please contact us. We’ll be happy to explain how your policy protects you and can help fill any insurance gaps that apply to your business.