A business owner policy is an insurance policy that provides protection for a business owner from several types of major liability or property risks. The value of this type of plan is that it combines several different forms of coverage into one simply policy that often costs much less than taking out individual policies for each type of risk. Small and mid-sized businesses often maintain business owner policies, since they do not usually have the resources on hand to recover from a catastrophic event.
There are several components of coverage that are included in a typical business owner policy. Crime insurance often forms the foundation for the policy, and protects the business owner from losses incurred due to theft of merchandise or business assets. Liability insurance provides protection in the event that a customer or employee is injured on the premises where the business operates. Business interruption insurance provides recovery of lost revenue in the event that some type of covered property loss negatively affects the ability of the company to offer goods and services for sale. Interruption insurance will often provide up to one calendar year of coverage.
It is not unusual for a business owner policy to also include such basics as property insurance that offers general coverage for every location operated by the company. Flood insurance is also often a desirable part of the insurance package in many areas, as is insurance for wind damage from tornadoes or hurricanes. There are also policies with special clauses that address various forms of liability that relate specifically to the industry associated with the company.
While each of these types of coverage can be purchased as independent policies, combining them all into a single business owner policy is often much more cost-effective. In order to structure the coverage to best advantage, the business owner should take the time to consult an insurance underwriter who can evaluate the business operation and its needs. This allows the underwriter to advise the owner on what types of coverage should be included in the plan, and allow the business to be covered for any possible contingency.
Applying for a business owner policy is usually no more complicated that obtaining any other type of professional insurance. Once the owner has worked with an agent to structure a plan that meets his or her needs, the provider evaluates the circumstances of the owner and the business, determines if all necessary criteria are met, then approves the policy. In some cases, there may be a waiting period for certain aspects of the coverage to go into full effect, before any type of insurance claim relating to those specific provisions can be submitted.