Which BOP plans allow add-on protections? Most standard Business Owner’s Policy (BOP) plans allow you to add optional protections, also known as endorsements. These add-ons let you customize your base policy with specific coverages tailored to your exact industry risks.
During the business owner’s policy application process, you might realize your coverages could benefit from some customizations. One of the primary benefits of choosing BOP insurance is that it’s a bundle of several essential coverages — including optional add-ons — in one convenient package. Those additional coverage options can help you personalize your policy to best fit your business.
If you’re wondering what customizations are available, you’re in luck. We’ve put together a brief overview of a business owner’s policy add-on coverages and which ones you may want to consider. We’ll also offer a few insurance recommendations to fill some gaps left by business owner’s policy exclusions.
What Are Common Business Owner’s Policy Add-On Coverages?
Common BOP add-ons include food spoilage, equipment breakdown, garage keepers coverage, cyber liability, and employee theft. These endorsements protect against specific risks that a standard commercial property or general liability policy might exclude.
Food spoilage.
Food spoilage or spoiled merchandise coverage reimburses you for perishable inventory lost due to power outages or mechanical failures. Eligibility for this endorsement is mostly limited to businesses in the food service industry.
Imagine you walk into work and realize your refrigerator died overnight, leaving the perishables inside spoiled. With this add-on, you could avoid having to replace the cost of the food on your own dime. To learn more about protecting your perishable inventory, read our guide on understanding food spoilage coverage for small businesses.
Equipment breakdown.
Equipment breakdown coverage helps pay for the repair or replacement of essential machinery that suffers a sudden, internal mechanical or electrical failure. This could potentially include anything from computers and ovens to boilers and heating systems.
If a refrigerator compressor fails, standard property insurance will not cover it. This BOP add-on might help you avoid paying for those repairs out of pocket. For more details on protecting your vital machinery, explore why small businesses need equipment breakdown coverage.
Garage Keepers Coverage
Garage keepers primary coverage protects customer vehicles left in your care, custody, or control. It is an essential add-on for auto repair shops, detailing businesses, and towing services.
General liability does not protect customer property left in your care. If a customer’s vehicle is damaged by fire, theft, or vandalism while on your property, this coverage steps in. Discover more about this vital protection in our garage keepers coverage explained guide.
Cyber liability insurance.
As you build your small business BOP, cyber insurance may be an addition worth considering. Cyber generally covers costs associated with stolen customer data, cyberattacks, and fraud. When your business experiences a data breach, necessary measures will likely include:
- Notifying your customers of the situation.
- Fixing the breach.
- Offering credit monitoring services to impacted customers.
And that’s just the tip of the iceberg. A 2022 study1 revealed that more than half of surveyed consumers reported having an interest in a company’s cybersecurity. With good reason. In 2021, 62% of U.S. companies experienced some form of data breach. These incidents can be a blow to a business’s reputation and credibility, and can lead to years of underperformance.
There’s no ironclad method to avoid cyber fraud. Cyber liability coverage, however, could help your business bounce back and run damage control if it were to happen to you.
Forgery and employee theft.
Does a business owner’s policy cover theft?
A standard business owner’s policy will typically cover theft which occurs on company premises, but it does not necessarily cover employee theft.
According to SCORE.org, small businesses have suffered greater median losses as a result of fraud in recent years. External and internal theft is a problem that should not be overlooked. No matter what type of business you run, adding the employee theft BOP endorsement provides essential protection.
What Other Insurance Coverages Should You Consider?
Looking for even more coverage than BOP alone can offer? Here are a few policies we recommend and some frequently asked questions regarding them.
Workers’ compensation insurance.
Does a business owner need workers’ compensation insurance?
It depends. Workers’ comp is recommended in most states for businesses with employees, but the exact eligibility criteria vary. Be sure to check your local requirements.
What’s covered with workers’ comp?
Workers’ comp typically covers costs resulting from an employee’s work-related injury or illness. These might include:
- Medical payments
- Lost wages
- Rehabilitation expenses
- Death benefits
Professional liability insurance.
What industries are professional liability geared toward?
A wide variety of businesses could benefit from a professional liability policy. Some common businesses include accountants, graphic designers, consultants, photographers, and even hair stylists. A more comprehensive list can be found here.
What does professional liability cover?
Professional liability generally helps protect business owners in the event they make a mistake in their work. It typically covers:
- Negligence or alleged negligence
- Omissions or alleged omissions
- Claims involving libel or slander
- Legal defense costs
Frequently Asked Questions
Yes, most insurance providers allow you to add an endorsement to your policy at any time. If your business purchases new equipment or expands its services, you can contact your agent to update your coverage immediately.
The cost of add-ons varies based on your industry, business size, and the specific coverage limits you choose. However, adding an endorsement is typically an affordable way to secure thousands of dollars in vital protection.
We Can Help Put it All Together
For a business owner or entrepreneur, insurance shopping can feel like a chore. But depending on your industry and business size, it may be required. But insurance is jargony and can take time to decipher. Your time is valuable, and you shouldn’t have to spend all of that time trying to find commercial coverage for your business.
So take back your time with Simply Business®. We work with a wide panel of carriers so you can browse multiple quotes in one convenient place. Compare policy options and customizations for BOP, general liability, and more. Here’s how to get started:
- Use our free quote comparison tool.
- Get matched with insurance options suited for your industry.
- Shop quotes, any time, 24/7.
Insurance can be complicated. We can help.
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References:
- Learn more at Comparitech.com.
- Learn more at CDN.NRF.com.
- Learn more at SCORE.org.
- Learn more at iii.org.