A Business Owner's Policy, or BOP, is a specific type of business insurance policy. It specialized in providing coverage for many of the risks your company is likely to face. It covers the common things, so to speak. Having business insurance is critical. However, your policy also needs to reflect the specific needs of your company. This typically can extend beyond the reach of BOP for a home improvement company. It is possible to modify and extend your protection, though. Here’s what you need to know.
Start with What BOP Includes
Your standard BOP policy includes, according to the Insurance Information Institute, the following:
- It provides property insurance for the buildings you own. It also includes contents coverage for the business’s valuables stored within. There are often two different forms here, including special or standard coverage. Special coverage extends to provide more complete protection.
- It covers business interruption. If your business has to shut down or move to operate due to a covered peril, this policy may help cover the costs. It may help cover the loss of income your company has. It might also cover any extra expenses of moving your business to a temporary location.
- It provides liability insurance. Here, it provides coverage, up to a certain maximum, for any instance in which the business has legal responsibility due to the losses caused to another person. This can include damage from defective products, poor installation, or injuries caused by your company’s tools.
Is That Enough?
Is a BOP enough for your home improvement business? The key here is to look at what you do on a day-to-day basis and then to determine how to extend BOP to further minimize risks. Here are a few things that may apply.
- As a home improvement professional, you are giving advice and guidance to others. You may need professional liability insurance, then. It can help you to cover any losses your clients suffer from inaccurate advice.
- If you operate vehicles as a part of your business, you also need to have commercial auto insurance. A BOP does not automatically include this, though you can add this coverage on.
- If you have employees, and are a larger company, you may need workers' comp coverage. It helps minimize your losses if your employees suffer injuries on the job.
Work closely with your business insurance agent. Be sure you have proper coverage to fit your business specifically. Adjust your BOP or buy additional insurance to minimize those risks to your company.