Essential Business Coverage

The most common policy for small businesses is the Business Owners Policy (BOP). RightQuote can help you determine the best combination of a number of different insurance policies and deliver them to your business as a single packaged contract.

Most small businesses need to purchase at least the following four types of insurance:

Property Insurance

Property insurance compensates a business if the property used in the business is lost or damaged due to such things as fire or theft. In addition to the building or structure, property insurance covers personal property such as office furnishings, inventory, raw materials, machinery, computers and other items necessary to a business’s operations. Depending on the policy, 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. It may also provide operating funds when the business is trying to get back on track after a catastrophic loss.

Liability Insurance

Any business can be sued. Customers may claim the business caused them harm due to a defective part, an error in a service or disregard for another person’s property. If the business is found liable, liability insurance pays damages, up to the policy limits, as well as attorneys’ fees and other legal defense expenses. It also pays the medical bills of anyone injured by or on the premises of the business.

Business Auto Insurance

A business vehicle policy covers automobiles owned by a business.

The insurance pays any costs to third parties for bodily injury or property damage for which the business is legally liable, up to the policy limits.

Workers Compensation Insurance

In all states (excluding Texas) an employer must have workers compensation insurance when there are more than a certain number of employees. The minimum number varies from three to five, depending on the state. Workers Comp insurance, as this coverage is usually called, pays for medical care and replaces a portion of lost wages if an employee is injured in the course of employment, regardless of who was at fault for the injury.

If a worker dies because of injuries sustained while working, the insurance provides compensation to the employee’s family. An extremely small business, with one or two people working out of a home, may not need workers compensation insurance. But, it may need more property and liability insurance than what is offered by a typical homeowners’ policy.