Purchasing
the Right Business-Owner Policy
As winter
approaches, the possibility of a customer slipping and falling on a
business's property increases.
With the average jury award exceeding $200,000 for individuals injured at a
retail store, it's a good idea for owners to review their business-owner policy
(BOP), particularly their liability coverage, to ensure that the policy has
grown with the business.¹
Generally, a BOP combines coverage in key business areas — property,
liability, and business interruption.
Property insurance covers damage or loss of items such as fixtures, equipment
and machinery, office furniture, computers and accessories, and inventory and
supplies.
Liability
coverage helps protect the business owner against claims arising from injuries
to or damages incurred by any party while on the owner's premises. Liability
insurance also protects the owner from claims due to negligent acts of an
employee, representative, or agent of the business.
Business interruption insurance covers the loss of income resulting from a fire
or other catastrophe that disrupts the operation of the business. It also can
include additional expenses for operating out of a temporary location.
Of the three types of coverage, one of the most critical is liability insurance
protection.
Determining the amount of liability insurance a business owner should purchase
depends on a number of factors, including the product or service provided by the
business, the amount of liability insurance required by the state in which the
owner conducts business, the value of the business assets, and the value of
personal assets.
Besides purchasing a BOP, businesses can help protect themselves by exercising
reasonable care in inspecting their premises. When it snows, any accumulation of
snow and ice should be removed from stairs, sidewalks, walkways, and driveways
on the property. When it rains, mats should be available for people to wipe
their shoes.
Businesses also should routinely check indoor fixtures, such as handrails, to
ensure that they are not loose; survey the landscape to make sure there are no
hazards, such as dangling tree branches, that could pose a threat to people; and
avoid situations in which an individual could slip and fall on a
"foreign" substance, such as oil.
By purchasing an appropriate amount of insurance and acting to prevent the
unforeseen from happening, business owners are taking the right steps to help
them stay in the boardroom and out of the courtroom.
1)
Insurance Information Institute, February 4, 2004
