Is a Business Owners Policy Worth the Money?

As a businessowner, you have to be careful about your investments and where you spend your money. Insurance is no different. While you need insurance to operate legally and safely, you want the best deal so that you can put your company’s assets where they’re most needed. But it’s still important to have the right policy to cover your business. a close up of a open sign

A business owners policy is a type of insurance policy that bundles insurance coverages for smaller businesses. This allows a small business to combine important coverages in one place that is supposed to be more affordable than purchasing the coverages separately. But is it really worth the price?

Let’s look at the numbers.

How Much is Business Insurance?

A business owners policy at its most basic state combines general liability insurance and commercial property insurance. The average cost of this policy is around $1,200. Compare this with the average costs of the insurance coverages alone.

General liability insurance, which protects the business against claims regarding bodily injury, property damage and personal or advertising injury, may cost a single small business an average of $636 a year.

Commercial property insurance, which provides compensation for loss of or damage to the business’ physical assets, may cost anywhere between $1,000 and $3,000.

These numbers aren’t set in stone, however.

All of these policies are subject to a variety of factors that can change your prices. If you have a lot of expensive property for the business, for example, you may pay higher rates for commercial property insurance.

Overall, a business owners policy (and the individual coverages offered beneath it) may vary in cost depending upon the business’:

Location
Size
Industry

Value of physical property
Coverage limits
Claims history

Based on these factors, your business owners policy could be as cheap as $500 a year or as much as $3,000 a year. Overall, this policy is designed to save you money by bundling coverages.

A business with a long history of claims will typically pay higher insurance rates than a business with no past claims. If your location has a long history of natural disasters, you could also face higher premiums. On the other hand, the smaller your business the less you may pay for business insurance.

Be sure to calculate how much insurance you need and compare prices between individual coverages and a business owners policy to make sure you are making the right financial choice.

Adding to Your Business Owners Policy

Also keep in mind that a business owners policy is relatively flexible and allows you to add coverages. Not only can this save you money, but it also provides ease with paying your premiums all in one place.

Consider adding coverages to your business owners policy to see if you can save money on important coverages. Insurance that is often added to a business owners policy includes:

Professional Liability: Professional liability insurance covers acts of professional negligence that may result in a client losing money.

Directors and Officers Liability: Directors and officers liability insurance protects a business if their directors or officers are sued due to their acts under the business, often including HR issues and employment practices.
Umbrella Liability: Umbrella liability insurance is an extra policy that fills in the gaps left over by your other liability insurance policies. If a claim exceeds the limits of your general liability insurance, for example, umbrella liability will help cover the residual expenses.
Commercial Auto Insurance: Commercial auto insurance covers vehicles used or owned by the business. These policies may include full coverage, which encompasses comprehensive coverage, collision coverage, liability, medical payments coverage and more.

The more coverage you add, the more you will likely pay in premiums. But more coverage also means that your business is safer from a possible lawsuit. A single lawsuit can send an unprepared business under without warning, so be sure to consider your business’ and industry’s risks of a lawsuit when looking for insurance.

There is no set yes or no when it comes to whether or not a business owners policy is worth the price, because the answer is different between businesses and policies. Every business has different needs and not all policies are created equal. It is critical to know your business’ insurance needs and compare prices before signing a policy. There are also common exclusions to coverage that you should keep in mind. Most property coverages exclude coverage for floods and earthquakes, for example, so you may need to seek additional insurance for certain protections.

Is a Business Owners Policy Worth the Money?

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