3 Benefits of a Business Owner’s Policy.

What is a BOP?  If you work in insurance long enough, this becomes a question you receive quite frequently.  Many small businesses shop their policy around themselves to many different insurance companies. This can save those businesses some money, but it does come at the expense of the business owner’s precious time. Most insurance companies attempt to remedy this problem by offering a Business Owner’s Policy (BOP).

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A Business Owner’s Policy is an insurance package designed for businesses in a particular industry. These packages can be adjusted to fit the needs of each individual business, but they most commonly come in packages specific to each industry.  Over time, insurance companies have found certain coverages are needed by all businesses in a particular industry.  Because they have a unique insight in to the loss history of many businesses in that particular industry they tend to recommend a certain package of policies for that industry.  By offering a business owner’s policy, insurance companies can make sure there are no gaps in coverage.  At the same time they can make sure the business is not carrying too much or unnecessary coverage. Carrying a BOP benefits a business owner in three main ways.

Pricing

Pricing is one of the first aspects that attract business owner’s to choosing a BOP.  Insurance carriers are more likely to give businesses a discount if they know they are going to sell a business multiple policies. Business Owners can do the shopping for themselves, but they have to spend time searching for better coverage and price instead of working on their business. With the help of a good independent insurance agent, a business owner can allow the agent to shop the policy around to many insurance carriers. This allows the agent to negotiate the best price and the most complete coverage. For this reason, it is important to choose an insurance agent who has relationships with many insurance providers, not just a select few. Many agencies work exclusively with just a few carriers and this does not allow the agent to shop around your policy if you are in a tough classification code or have a negative claims history.

No gaps in coverage

Another great reason to consider a BOP is to ensure there are no gaps in coverage. Shopping for your policies individually might save a business a few bucks on the front end, but it be very detrimental to your business when a claim occurs.  This is a portion of the insurance industry where a few grey areas occur. When an incident occurs and a business has policy from many different carriers, at best they business will have to wait additional time while the carriers determine who is liable for the claim.  At worst, having several different carriers can cause the claim to not be covered at all.  On the contrary, if the policies are all with one carrier, the underwriter will just determine which policy needs to kick in and then processes the claim.  This is because, if you have a BOP with just one carrier typically there is General Liability, Professional Liability and an Umbrella policy. In this case the insurance company just determines which policy is in effect and processes your claim. When every policy is carried with one insurance carrier, that carrier can ensure there are no gaps in your policy.

Certificates

The final way businesses benefit from carrying a Business Owner’s Policy is when there is a need for a certificate. This occurs when businesses are involved in projects they are contracted on. Many artisan contractors do work for several general contractors. Take an electrician as an example. For each general contractor an electrician does a project for they need a certificate proving insurance coverage. If each coverage is with a different carrier that is an additional call the electrician has to make. If that electrician has a BOP they call one agent and can get a certificate for all of their policies.

These are three of the many benefits business owners get when they go with a Business Owner’s Policy. BOP’s are a win-win situation because the insurance company benefits from more business while the business owner benefits from having better service, more complete coverage and usually a better price. When in need of a business insurance quote it is also important to consult with an insurance agency who partners with many carriers. This will allow their agents to shop the policy to more carriers and ensure your business is getting the best coverage at the absolute lowest rates in the industry.

What are the main benefits of a Business Owner’s Policy (BOP)?

A Business Owner’s Policy is a tailored insurance package for businesses in a particular industry. The package can be adjusted to fit the needs of each individual business, but they come in common packages specific to each industry. Insurance companies have found certain coverage’s common to each industry and attempt to get business owner’s as fully covered as possible. Most include General Liability, Professional Liability and Business Property Insurance. With a business owner’s policy insurance companies can make sure there are no gaps in coverage and make sure the business is not carrying too much or unnecessary coverage. Carrying a BOP benefits a business owner in three main ways.

Pricing is the main benefit that first attracts business owner’s to carrying a Business Owner’s Policy. Insurance companies are more likely to give businesses a break on price if they are selling that business multiple policies. Business Owner’s may be able to call around and get a better price on each individual policy, but that is time spent not working. With the help of a good insurance agent a business owner can allow the agent to shop the policy around to many insurance carriers. This allows the agent to negotiate the best price and the most complete coverage. For this reason it is important to choose an insurance agent who has relationships with many insurance providers, not just a select few. Many agencies work exclusively with just a few carriers and this does not allow the agent to shop around your policy if you are in a tough classification code or have a negative claims history.

Ensuring there are No Gaps in Coverage is the next benefit of a BOP. Shopping around for each individual policy takes lots of valuable time for business owner’s. In most cases it does not save the business as much as getting a quantity discount by combining coverage’s. A more important benefit of a BOP is making certain there are no gap’s in coverage. When businesses shop their policies around a la carte it can cause there to be grey area’s between exclusion’s that are not covered.  If all policies are bought from one carrier the insurance provider can guarantee you are fully insured.

For instance, businesses that get a general liability policy from one insurance carrier and a professional liability policy from another carrier may have an exclusion in both policies that make the occurrence not covered. This is where insurance has many grey areas. When an incident occurs the business will more than likely have to wait longer while the insurance companies determine who is liable for the incident or if anyone is liable for the occurrence at all. If you have a BOP with just one carrier typically there is General Liability, Professional Liability and an Umbrella Policy. In this case the insurance company just determines which policy is in effect and processes your claim.

Certificates are the final way businesses benefit from BOP’s. Certificates are needed when businesses are involved in projects they are contracted on. A certificate is legally required before work can start on that project. If you work on many projects with different general contractor’s than you will need this certificate for every general contractor you work with. If you have a BOP that is one phone call only.  For example, many artisan contractors do work for several general contractors. Take an electrician as an example. For each general contractor an electrician does a project for they need a certificate proving insurance coverage. If each coverage is with a different carrier that is an additional call the electrician has to make. If that electrician has a BOP they call one agent and can get a certificate for all of their policies.

Again, these are three of the many benefits of having a Business Owner’s Policy. The next time your business is up for renewal it is probably best for you to bring up a BOP with your agent. Insurance carriers are typically more aggressive with discounts when they are getting more of your business.

 

Insurance Help on Vacation

A while ago, I took a phone call from a client in need of help getting Errors & Omissions (E&O or professional liability) Coverage for a large contract he was working on.  However, my client was in Italy on vacation and the coverage needed to be in place before the job started in three days. To say he was in a panic would be an understatement.  I wrote his work comp insurance and our agency handled many endorsements on his policy for him.  However, it was a different agent here within our company who wrote his Liability Policy.  But he trusted me with his insurance needs, so I presented him with the following options:

  • I could write him a new Liability Policy with E&O Coverage included.
  • I could become his Agent with the current carrier, but it would take several days.
  • I could write a stand alone E&O Policy, but it would cost a little more since the liability would not be attached.

This actually was no problem at all. I just needed an Errors and Omissions application filled out, signed and returned to me. Thanks to technology the client had all of this information back to me by the next morning. All the way from Italy.

Liability Insurance help on a beach vacation.

When I presented the first quote, which was the stand-alone E&O policy, my client was shocked at the price of the coverage. In the past he had only had a liability policy. I explained the bulk of his company’s exposure was in the Errors and Omissions Liability and he should expect to pay more for this coverage.

The second quote was with a new carrier.  It was a Business Owners Package with E&O as an added coverage. This was also the carrier I had his Workers’ Compensation Policy with. This was a great quote and made the most sense to me. However, the client did want to wait for the quote from the carrier he currently had for his liability coverage. This is the company I had taken over as the Agent of Record (AOR). In the end both carriers had great pricing and coverage. My client chose to go with the carrier that already had written his Work Comp and offered all of the endorsements he needed for the contract he was working on.

After discussing all of the projects his company had coming up in the next year I offered him a Commercial Umbrella Policy to extend his coverages. I explained that this would help protect his company if ever a claim went beyond the limits of his policy. The client thanked me for mentioning an umbrella policy and he agreed that his business needed this coverage.

We were able to get all the documents signed, the policy bound and all of the needed certificates of insurance out to the Holder by the deadline. It all got taken care of expediently. All while my client was on vacation.