Insurance Policy Review for Small Business Core Coverage

General liability insurance is a commercial line that is generally designed to respond to certain claims that your business caused bodily injury or property damage to a third party, or certain advertising-related harms. What is covered, what is excluded and how much applies depend on the carrier, the policy form and your state, so the declarations page and policy wording matter.

Commercial property insurance is a separate commercial line that generally relates to the physical things your business owns or uses, such as a building, equipment, inventory and furnishings. Whether you need it often depends on whether you own or lease space, what you keep on site and what your lease or lender requires. Covered causes of loss and exclusions vary, so it helps to read them closely.

A business owner's policy, often called a BOP, is a package that commonly combines general liability and commercial property, and sometimes other coverages, into one policy for eligible small businesses. Eligibility, what is included and how it compares with buying each coverage separately vary by carrier and state. Related lines such as errors and omissions (professional liability) or workers' compensation are typically separate and are not automatically part of these core policies.

Many small business owners have started with general liability, often because a landlord, client, lender or contract asked for proof of coverage. A certificate of insurance is commonly how that proof is shared. Requirements differ widely by industry, contract and state.

Owners have often compared a BOP against separate policies by looking at what is bundled, how the policy is structured and how well it fits the business. Bundling may be convenient, but it does not guarantee a better fit or lower cost, and some businesses are not eligible for a BOP at all.

Professional services businesses have traditionally looked at errors and omissions coverage alongside general liability, since the two address different kinds of claims. Reviews have often been revisited when a business hires, signs a new lease, adds services or changes locations, because the answer to what you need can change over time.

A licensed independent agent may help you sort out which coverages are relevant to your business and which are not. An agent must be licensed for the specific line of commercial insurance they write and in the states where they operate, so it is reasonable to ask about both. Personal lines such as auto, home, life and health are separate from commercial lines and follow different rules.

A visit or call is generally a conversation about how your business operates: what you sell, who your customers are, whether you own or lease, what equipment and inventory you have, whether you have employees and what your contracts require. An agent may then walk through policy options and explain how the declarations page, limits, exclusions and conditions work. Nothing about this process promises a particular coverage outcome or claim result.

Helpful questions to ask include: Which of my risks does this policy address, and which does it not? What are the key exclusions? Is a BOP available to my kind of business? How do separate policies compare with a bundle? Is errors and omissions or another line worth discussing? Which carriers do you work with, and in which states and lines are you licensed? Asking for an explanation in plain English is always fair.