What to Know About Adding Coverages to Your Business Owner’s Policy (BOP)

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.

Business Owner’s Policy Add-On Coverages 

Cyber.

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? 

We hear this question many times from our customers as they search for commercial coverage. Because commercial property coverage is included, a standard business owner’s policy will typically cover theft which occurs on company premises, but not necessarily employee theft. 

No one wants to think that a trusted employee would do such a thing, but external and internal theft is a problem that should not be overlooked.² 

And petty theft isn’t the only risk. Forgery and financial tampering can happen to any business owner, and in recent years, small businesses have suffered greater median losses as a result of fraud.³ The takeaway? No matter what type of business you run, adding the employee theft BOP endorsement could be worth considering.

Spoiled merchandise.

To add this endorsement to your business owner’s policy, eligibility would mostly be limited to businesses in the food service industry. Running a restaurant comes with a lot of upfront costs, including shelling out for quality food ingredients. 

Imagine you walk into work and realize your refrigerator died overnight, leaving the perishables inside spoiled. With spoiled merchandise coverage, you could avoid having to replace the cost of the food on your own dime.⁴ And speaking of broken equipment…

Equipment breakdown.

In that same scenario, you’d also need to repair or replace the unusable refrigerator. This BOP add-on might help you avoid paying for those repairs out of pocket. The equipment breakdown endorsement typically helps in the event of a mechanical malfunction. This could potentially include anything from computers and ovens to boilers and heating systems.

Other Coverages to 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’ comp.

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.

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

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:

1. Use our free quote comparison tool.
2. Get matched with insurance options suited for your industry.
3. Shop quotes, any time, 24/7.

Insurance can be complicated. We can help.

References:

1. Learn more at Comparitech.com.
2. Learn more at CDN.NRF.com.
3. Learn more at SCORE.org.
4. Learn more at iii.org.