small business coverage Archives

If you’re a small business owner, you’ll need multiple types of commercial insurance to protect your business. But there are ways to simplify things: for example, you can purchase a business owner’s policy. A business owner’s policy (BOP) is an insurance package that combines two (or more) essential types of insurance, commercial property and general liability.

A BOP is a great choice for small business owners. Purchasing these two types of policies separately typically costs more than purchasing a business owner’s policy. And beyond the financial security that a BOP will give you, you’ll also get more leverage with landlords and important clients, since they’ll know that a lawsuit won’t force you out of business. They’ll have more faith in your longevity if you can produce proof of insurance.

How Does a Business Owner’s Policy Work?

As pointed out above, a business owner’s policy is basically a bundle of two types of commercial insurance: general liability and commercial property insurance. A BOP will cover you for any claims that would fall under those two types of policies and protect your business from losses. This type of policy covers a number of significant legal hazards your small business might experience in one easy package.

General Liability

The first line of protection for a small business owner is general liability insurance, which business owner’s policies always include. General liability covers things such as:

Third-party bodily injuries – If the public frequently visits your business, you’ll need to be protected against claims of bodily injury, since you are responsible if someone slips and falls or is hurt while on your property. A business owner’s policy will cover the legal fees and other costs associated with the claims made against you if any accidents occur at your place of business.
Third-party property damage – You are liable for the expense of repairing or replacing any damage If you or one of your employees causes damage to another person’s property. These expenses will also be covered by your business owner’s policy.
Product liability claims – Your business can be held legally responsible for any harm that your products cause to other people or their property. A business owner’s policy will offer a financial safety net if your business sells or manufactures physical products.
Advertising injuries – You could face legal repercussions if you or a member of your staff slanders a third party, violates a company’s copyright, or engages in other types of libel. Your legal representation, as well as any court settlements or awards, will be covered by your business owner’s policy.

Any small business owner who doesn’t have general liability insurance is taking a chance: any lawsuit you face could make a huge dent in your profits, or even bankrupt you. You might even need to have this type of insurance: when you sign a contract or apply for a small business loan, you could be required to provide evidence of liability insurance.

Commercial Property Insurance

The other major type of policy bundled into a BOP is commercial property insurance. This coverage offers financial assistance in the event that your facility or commercial property sustains damage or loss. Typically, this policy covers fire, theft, vandalism, and various weather-related incidents.

You would be responsible for paying for these damages out-of-pocket without commercial property insurance, or a business owner’s policy. Your insurance policy will cover the costs of repairs, the replacement of any broken equipment, and assist in the recovery of your business.

Commercial property insurance is a necessity for any company that owns or rents commercial real estate. Typically, landlords anticipate that their tenants will be covered by their own commercial property insurance. This insurance is also a must if you produce goods, hold stock, or keep equipment.

Business Interruption Insurance

You can also add business interruption insurance to your BOP bundle. This type of policy covers losses that arise as a result of your company temporarily slowing down or ceasing operations due to theft, vandalism, or another insured event.

Every business with recurring expenses like payroll should consider purchasing a BOP that includes business interruption insurance. Business interruption insurance will assist you in keeping up with your obligations if your company is unable to generate revenue for a period of time.

Additional Coverages

In addition to the major types of coverage described above, there are numerous extra coverages that can be added to a BOP that might be right for your specific business. For instance, a small business will frequently benefit from the following endorsements:

Employee Dishonesty – Hopefully all of your employees will be trustworthy and honest, but this isn’t always the case. Employee dishonesty coverage will cover claims made by a customer if your employee steals from them.
Money and Securities – There is a chance that cash will be stolen, either on or off the premises, from your business. With this endorsement, your business will be compensated up to the insured amount.
Business Expense Income and Extra Expense – This add-on covers the loss of revenue and additional expenses that arise if a small business relocates due to structural damage brought on by a covered hazard.
Equipment Breakdown – Most businesses rely on equipment like pricey HVAC systems to maintain a comfortable environment for clients and staff. Your equipment breakdown insurance will cover the pricey repairs or replacement if these systems malfunction.

Each of the above endorsement’s prices are determined by your insurance company. And will either be a flat rate premium or a percentage of the policy premium. Additionally, the cost of these endorsements is determined by the limitations of coverage for each individual policy. It’s also important to remember that an endorsement normally cannot cover things like vehicle insurance, workers’ compensation, or floods, which are covered by other policies.

What Isn’t Covered by a Business Owner’s Policy?

Depending on your business, you may need to purchase other insurance policies that BOPs generally don’t include. This can include:

Workers’ compensation insurance – Workers’ compensation insurance will cover medical bills and lost wages for employees who get injured or fall ill on the job.
Professional liability insurance – Professional liability insurance, often called errors and omissions insurance, will protect you from accusations of negligent behavior or mistakes made by you or your employees when rendering your professional services.
Commercial auto insurance – Commercial auto insurance is yet another important policy for companies that use cars and trucks in their everyday dealings. This policy will cover you if an employee is held accountable for a car accident.
Data breach coverage – Data breach insurance, also known as cyber liability insurance, can assist in covering costs incurred as a result of a data breach. These costs can include alerting impacted parties, engaging credit monitoring services where necessary, and public relations. If your company handles or stores confidential patient, employee, or customer information, this type of coverage is crucial.
Liquor liability – Businesses that sell, serve, or distribute alcohol are protected by liquor liability insurance. This kind of commercial insurance might assist in paying for claims of physical harm or property damage done by someone who has been served alcohol by your business.
Flood/earthquake coverage – This coverage will cover losses associated with natural disasters such as floods or earthquakes. These policies are generally sold separately. This is because not all areas need both.

Which Types of Businesses Should Consider BOPs?

Businesses must typically meet requirements for both annual income and total number of employees in order to be eligible for a BOP. Here are a few examples of the types of companies that typically purchase a business owner’s policy:

Self-storage facilities (storages facilities that offer outdoor vehicle storage are not eligible)
Retail, grocery, and convenience stores
Apartment buildings
Gas stations
Small office buildings (typically with less than 6 stories)
Small motels (typically with less than 3 stories)
Wholesalers
Contractors (though there are many restrictions, like yearly payroll caps and building size)

Additionally, very small businesses, typically those with less than 4 employees, may qualify for what’s known as a micro-BOP. These policies are severely limited and usually only cover property loss. These policies are also not available through every carrier.

Eligibility Requirements

Not everyone needs a business owner’s policy. Many insurers disqualify larger organizations from being eligible for a BOP plan. This is because they are more likely to find more comprehensive protection for their needs through other policy types. Additionally, BOP eligibility and the underwriting process may differ between insurance carriers. The majority of qualified businesses generally:

Operate in a low-risk industry
Do business anywhere besides the business owner’s home
Have less than 100 employees
Generate less than $1million dollars in annual revenue
Operate out of a smaller space
Conduct business primarily on-site

How Much Does a Business Owner’s Policy Cost?

The cost of a BOP generally varies depending on your business’s underwriting factors and any additional coverages needed. With that being said, the typical annual premium for a business owner’s policy is $1200. But the cost can range from $500 to $3500. Your specific coverage limits, industry, claim history, amount of employees, total annual revenue, and building, contents, and equipment replacement costs are all factors that determine the cost of your BOP.

Coverage Limits

Your BOP’s coverage limits have a direct effect on the price of your premiums. Many small businesses buy a BOP with a coverage limit of $1,000,000/$2,000,000. Meaning that over the course of the policy, the insurer will offer $2 million in total coverage and $1 million in coverage per claim per year. But there are BOPs available that come with limits starting at $300,000/$600,000 and going all the way up to $2 million/$4 million. Depending on your insurer, larger limits might also be available.

Industry

Industries with higher risk factors will have to pay a higher premium.

Property value and type

The price of the commercial property insurance element of your BOP will vary based on the type and value of the assets you’re covering. The cost will increase in direct proportion to the value and difficulty of replacing your property.

Location, size, and age of your business

Costs will also vary depending on your business’s location and length of operation. In general, premiums for newer enterprises are higher. In addition, you are more exposed to risk and more likely to spend more for a BOP the more employees you have.

Claims history

When providing you with a quote for a premium, insurers pay close attention to your claims history. If you have previously made a lot of claims related to your business operations, you will likely pay higher premiums.

FAQs

Is a Business Owners Policy required by law?

A BOP is made up of two types of insurance: general liability and business property insurance. There is no law requiring either one. However, a lot of commercial landlords will require you to buy commercial property insurance aka business renter’s insurance. Before you’re allowed to sign a lease your landlord might need to see proof of this coverage. Additionally most of your client’s contracts might also require you to have general liability insurance. So to meet either of those needs you still need to have both of these plans and the easiest way to get both in one go is with a BOP.

Does a Business Owners Policy cover independent contractors?

A BOP usually only covers you and your employees, independent contractors are typically not considered your employees. You can add contractors as temporary additional insured on your policy, or you can even require them to buy their own general liability insurance in their contract.

Is a Business Owners Policy right for me?

If you own a small business that makes less than $1million a year, you might benefit from a BOP. A BOP is a great way to protect your business with the basic insurance coverage. It helps keep your business running and protects you from potential financial disaster in case of an emergency.

How to Buy a Business Owner’s Policy

Ask your current insurer if they offer a business owner’s policy if you currently have general liability insurance, property insurance, or another type of commercial policy through them. You could end up paying less by bundling your policies with them.

Various insurance companies offer business owner’s policies, so it might feel overwhelming to do all the research. That’s where EZ.Insure comes in. We can help you compare policies from the top insurers in the nation. Our highly trained agents can save you hundreds of dollars a year by working with your budget to get you the policy your business needs. To get started, simply enter your ZIP code below, or give one of our agents a call at (855)-694-0047.

How Your Group Health Premiums Are Calculated

How Your Group Health Premiums Are Calculated text overlaying image of a ben and calculator on a white table In 2023, group health plans for one person cost an average of $7,739 and plans for a family cost an average of $22,463. Those numbers are expected to have up to a 7% increase in 2024. However, there are ways to lower how much you pay for health insurance. It all depends on how your premiums are calculated. If you know what factors affect your bottom line, you can take steps to lower your total premium.

For group health insurance, premiums are calculated for each worker who signs up for the plan, plus the costs of adding a spouse or children. The total price for the group plan is calculated by adding all of the individual premiums up. Most companies have their employees pay a portion of their plan cost. Then the company takes those payments and then pays the rest of the cost to the insurance company every month.

How Group Health Insurance Works

Since the risk is spread out among more people. The cost of group health insurance is generally much lower than the cost of individual plans. Once the company decides on a plan, employees can choose whether or not to sign up for coverage. However, group health plans usually need at least 70% of a company’s employees to partake, in order to be effective. Companies usually offer different levels of plans so that enrollees can choose between basic coverage or more advanced coverage with add-ons. Depending on the plan, the premiums are then split between the company and its employees. Businesses can offer further protection by allowing their employees to add their spouse or children to the plan. Although doing this typically means the plan becomes more expensive.

The Factors

Since every business is different, your premium could be higher or lower based on a number of factors that are used to figure out how much your plan will cost. It also depends heavily on the group being insured.

Fully insured with less than 50 employees – Premiums are based on how many people in your area, not just from your business, are signed up for the same plan with the same insurance company. The cost of the insurance is also based on how old the enrollees are. So, everyone the same age with the same insurance plan from the same company will pay the same price. The rates go up every year based on their age. Some of the annual renewal increase at your company will come from the fact that your workers are getting older.
Fully insured with more than 50 employees – Premiums are calculated based on the age, gender, location (zip code), and medical conditions (expected healthcare costs) of your workers and their dependents who are covered by the plan.
More than 100 employees – Groups with more than 100 workers are counted the same way as businesses with more than 50 workers. Rates are based on the age, gender, location (zip code). And medical conditions (expected healthcare costs) of your insured workers and their dependents.

Other factors are included in calculating your premiums such as:

Size of The Group

How much you pay can depend on how many people are on your group plan. This number includes both your employees who choose to join your plan and their family members who join through an employee. By spreading the health risks of a few people over a larger group, a bigger group can help you pay less for your insurance.

Health of The Group

Your rate is affected by how healthy the group as a whole is. Even though the Affordable Care Act says that insurers can’t change premiums or refuse coverage based on a person’s pre-existing conditions or general health. The American Academy of Actuaries says that the health of the group as a whole can play a role in figuring out premiums. If a risk group has a lot of people with higher expected claims, the average premiums will be higher. This can be good for your business, as the Academy also says that premiums will be lower if a risk group avoids people who are likely to make more claims. Or if it can cover the costs of people who are likely to make more claims by signing up a lot of people with lower costs.

Average Age

The Affordable Care Act (ACA) says that insurers can’t change rates based on things like gender, but they can still take age into account. Rating by age is still legal as long as the ratio of the most expensive adult age band to the least expensive adult age band doesn’t go above 3:1. This means that in a group plan, the average age of your group can affect how much you pay.

Claims History

Going to the doctor often can add up. Insurance companies make changes to your prices over time based on how many claims have been made and how much they cost. When it’s time to renew your insurance, an insurer will look at how often your group has filed claims and make changes based on that. If a few of your employees had health problems that required them to go to the doctor often or spend a lot of money. That may be represented in your updated premium cost.

Tobacco Use

The Affordable Care Act (ACA) says that group health plans can charge people who smoke up to 50% more for their health insurance rates than people who don’t smoke. This is called a “tobacco surcharge.”

Industry

Different jobs have different amounts of danger. Your insurance company may change your rates based on what your workers do for a living. For example, office workers don’t face the same health risks as people who work in factories, buildings, or offshore. So their insurance premiums may be lower than those of people in other jobs.

Coverage Amount

Group health plans are not all the same. How much you and your workers pay will depend a lot on how much coverage you get. When you have better coverage and lower out-of-pocket costs, your premiums may go up. Due to the extra covering, adding on extras like dental and vision plans can also raise your premiums.

Can My Employees Be Denied?

A person with a medical problem can’t be kicked out of a group health plan. The health insurance must either cover everyone in the group or not cover anyone. They can’t choose one or more people. A fully-funded health insurance plan cannot be turned down by a company with less than 50 workers. Carrier participation rates are based on a ratio of the number of employees who are insured to the total number of employees who are qualified. This number is different for each insurance company, so you should talk to your health insurance agent about it.

Saving on Group Health Premiums

For a small business owner, health insurance rates can be expensive, but you don’t have to accept what your company is being charged. You might be able to use certain strategies to lower your costs and make your workers healthier.

Start a Wellness Program

Since the number of claims has a direct effect on your premiums. It can pay to make sure that all of your workers are in good health. Through health education and wellness practices, a customized workplace wellness program can help people choose to live healthier lives. This can lead to a healthier, more active workforce. And lower overall rates by reducing the number of doctor visits caused by diseases that could have been prevented. It can also help attract and keep good employees because they know their employer cares about their health and safety.

Telemedicine Access

Giving your workers access to a mobile doctor 24/7 is another way to cut down on the number of trips to the doctor. With telemedicine services, your employees can talk to a real doctor by phone, video chat, or online chat. This lets them get the answers they need without making an in-person visit with the doctor. This means they don’t have to pay a copay and your plan doesn’t have to pay for an extra claim.

Economy Scale

Depending on where you get your insurance, you might be able to use the “economy of scale” to your advantage. Larger businesses have more workers and more buying power. But smaller businesses don’t have as many employees to save money through economy of scale.

How To Enroll

There are countless group health plan providers and plans to choose from so choosing can be difficult. But we’re here to help! You can call EZ for a personal agent to help you sort through your plan options, get free quotes, or to simply find out more about group health insurance plans. Our experts can help you save hundreds of dollars a year by finding the best plan for your business. You can reach one of our highly trained agents at 877-670-3531, or enter your zip code in the box below for free instant quotes.

ATTN Small Business Owners: 6 Reasons You Should Give Your Employees Insurance

Not convinced small business coverage is worth it? Find out why we think it is.

1. It’s Cake.

As a business owner, your greatest currency is time. So the last thing you want is to waste that on looking for the right group plan.

When you hire an agent, you hire a full-time tour guide committed to navigating you through the selection process. With demographics, health concerns, and company size to consider, there are plenty of factors that must be included in your final decision. An agent can explain the nitty-gritty details of selecting a plan that fits your company’s needs, instead of you spending an unbelievable amount of time trying to digest the vast sea of information. Consider them

Cartoon of a man in a suit sitting on a chair with papers in his hand, with another hand in the picture giving paperwork to man sitting down. — *An agent can explain the nitty-gritty details of selecting a plan that fits your company’s needs, instead of you spending a large amount of time trying to figure it all out*

your “sparknotes” of insurance plans.

This connection is 1-to-1, because trust us – we hate spam calls as much as you do.

Connect With a Personal Agent Now

2. Less Money (From You), Less Problems.

One of the biggest misconceptions about purchasing insurance is the hefty price tag that comes along with it. And that can be true, if you go about the process in the wrong way. So we’re here to dispel that myth.

Compared to individual health insurance, high costs of one insured person have a smaller effect in a larger pool – in other words, more people are paying to support the few who use the benefits of being covered to their full extent.

With comparison shopping, you avoid that. You are guaranteed to find the right plan at an affordable price. You can contribute nothing to a plan – and it will still be beneficial for your employees. No risk is necessary.

It is important to keep in mind that you are not only the owner of your company; you are the owner of the plan selection.

Checking out your options is a great place to start.

3. “I Want YOU To Buy Health Insurance!”

Little figurines of people passing money to each other from a pile down a line towrds a yellow piggy bank. — *You end up saving money by offering employees group insurance. Employer contributions are tax-deductible, employer payroll taxes are reduced by 7.65% of employee contributions, and more!*

If you still don’t believe in the affordability of group health coverage, consider this – it’s on Uncle Sam. Two words for you: Tax. Benefits.

Here are the tax savings you get by offering group health insurance:

Employer contributions are tax-deductible
Employer payroll taxes are reduced by 7.65% of employee contributions
Employer workers compensation premiums are reduced
No payroll taxes and workers compensation premiums on money used towards health benefits.

And here are the tax savings your employees get by receiving group health insurance:

When employees buy health insurance on their own, they have to use post-tax dollars to buy it. They make money, the government taxes that money, and then they take the remaining amount to buy what they need.
When employees buy health insurance through a group plan, they pay for the insurance with pre-tax dollars. That can save them up to 30 to 45% on their health insurance premiums.

4. Healthy Employees = Happy Employees

You might not be able to buy the Beatles’ love, but you can buy your employees’.

Studies show that small business health insurance plans increase employee loyalty and decrease turnover. There’s scientific proof that purchasing insurance for your employees can increase retention and aid in recruitment. Mic drop.

In all seriousness, health insurance is a big deal for both employees and job seekers. For some, it’s even the deciding

factor between job offers.

A group of employees standing in a circle with their hands on top of one another. Camera view is looking up at their palms. — *Healthy employees means less visits, less appointments, and less sick days. What this means is more productivity in the workplace.*

Providing health insurance, despite not being a large corporate powerhouse, shows how much you value your potential and current employees. Which – if you’re a good boss – is a lot.

5. And Happy Employees = Happy Boss

You can imagine that an employee with a burst appendix or an inflamed wisdom tooth might be a little distracted when calculating the day’s revenue. But only a little.

Employees who aren’t provided health insurance have an increased likelihood of avoiding doctor appointments or hospital visits. In short, they have an increased likelihood of being unhealthy.

Additionally, healthy employees means less visits, less appointments, and less sick days. If you focus on “saving money” at the cost of your employees’ health, we’re tellin’ ya, it’s just going to come back and bite you in the bottom.

Or your bottom line.

6. The Gift That Keeps on Giving

Cobra isn’t just a snake.

The Consolidated Omnibus Budget Reconciliation Act (COBRA) is a health insurance program that allows an eligible employee and his or her dependents the continued benefits of health insurance coverage in the case that employee loses his or her job or experiences a reduction of work hours.

Ready to Get Your Cost-free Quote?

Let’s Go.

Tag: small business coverage

Jump To:

How Does a Business Owner’s Policy work?

Additional Coverages

What Isn’t Covered?

Which Types of Business Should Consider a BOP?

Eligibility Requirements

The Cost

FAQ

How To Buy a BOP

How Does a Business Owner’s Policy Work?