Business Owner’s Policies (BOP) are limited to small, low-risk companies. You can add benefits for more coverage, or choose a similar Commercial General Liability (CGL) policy if you do not qualify.
There are, however, very specific requirements to enroll in a BOP. Though they are a great option, they may not be available to all business owners. Let’s take a look at who is eligible for a Business Owner’s Policy.
As you may already know, BOP is limited to small businesses. But what is considered a “small business?” In terms of size, insurance companies consider less than 100 employees within the realm of eligibility.
The “small” qualification is also based on the size of the building(s) itself. This is not a specific square-foot measurement, but rather based on the insurance company’s own consideration—the less space your policy would cover, the more likely it is to qualify.
Relatively Low Revenue
For small business owners, $1 million worth of revenue sounds like a lot of money. However, to be considered eligible for a Business Owner’s Policy, your revenue must stay below that million-dollar threshold.
Only low-risk industries are eligible for a BOP. “Low-risk” is a very loose term, but the idea is simple—the less likely for an injury to an employee or customer, the more it falls within this category.
For example, an IT consulting company is far more likely to be eligible for BOP than a construction company.
Minimal Operation Costs
Business Owner’s Policies will cover your day-to-day expenses if you are unable to pay them. However, it will only do so for less than 12 months. Your business must, then, only need a year’s worth of operation-supplemental costs.
Alternatives to BOP If Your Business Doesn’t Qualify
While BOP works well for many small business owners, not everyone will qualify. If you don’t qualify, a great alternative is a Commercial General Liability (CGL) policy.
A BOP includes CGL coverage along with other benefits. On its own, CGL provides important legal coverage. And, if you still want those additional benefits included in BOP, you can add endorsements to your CGL policy.
Endorsements provide more coverage not available in your basic CGL plan. Let’s say you own a construction company and don’t qualify for a BOP. You can add an industry-specific endorsement to cover the loss or damage of specific tools, property, etc. for your business. You can also add hired and non-owned auto insurance to both your CGL policy and BOP if your business uses any vehicles.
Considering a BOP For Your Business? Call Redwood Agency Group
Whether you are eligible for a BOP or need a different coverage for your business, Redwood Agency Group can help find the policy you need at the best price. We’ll compare the options of 15+ carriers to make sure you’re getting exactly what you need. For a FREE quote, call (512) 994-0894 today!