Whether you have been running your business for many years or you’re just getting started, all businesses need insurance.
There are many different types of commercial insurance and your business may need multiple lines of coverage, or just one. Below is a brief breakdown of how business insurance in Colorado may be written across multiple lines.
BOP – A BOP is an acronym for Business Owners Policy. It bundles multiple coverages together under one policy. A BOP will likely cover your premises liability at your office (think slip and fall as someone walks into your office), as well as your business property like computers, desks and office furnishings. The coverage will be built into the policy by the carrier, and you are choosing the various limits for each applicable coverage. Because coverage is designed by the carrier these policies are usually for small businesses of a specific type that fit within the insurance company’s guidelines.
CPP – A CPP is a Commercial Package Policy. Think of this policy as an a la carte service where you pick your coverage for property, liability, employment practices, etc. Because you are customizing coverage, a CPP is a better fit for bigger businesses facing more risks. A CPP will not cover Directors and Officers (D&O) liability, health and disability, and workers compensation.
BAP – A BAP is a Business Auto Policy. This is similar to your personal auto policy, except it is designed for the needs of a business. There are carriers that will help small businesses that may have a single vehicle, as well as those with large fleets. Business auto policies use symbols to determine coverage. A business with a fleet of vehicles will need broad coverage to make sure they don’t have to change autos on an insurance policy every time a vehicle is purchased or replaced. A small business with one vehicle may need the symbol for coverage on that single vehicle only, and any changes would require notice to the insurance company. While the personal lines auto market is treated like a commodity, business auto is not. If you are unsure what symbols you need and the appropriate limits you should talk to a licensed agent for guidance.
Workers Compensation – Work Comp, as it is referred to by most, is a policy that covers your employees if they get injured on the job. In Colorado it is illegal to have an employee and not have workers compensation coverage. Penalties and fines can be severe for those not in compliance. Usually a business owner with a 10% stake in the company or greater can exclude themselves from workers compensation coverage. If you aren’t sure what your business needs, a licensed insurance agent and help. At Moreland Risk Management we work with multiple carriers to make sure your workers compensation rates are fair. An experienced agent can be a big asset when it comes to workers compensation because the rates are based off the class of business you are in, and the applicable payroll for that class. If you have the wrong class on your policy, you may be overpaying, and if you are underpaying the carrier will likely collect the difference at your annual audit. Make sure your policy is setup correctly from the start to avoid a headache at renewal.