What Is a Business Owner’s Policy?
A Business Owner’s Policy bundles two common IT insurance policies:
Insurers only sell BOP Insurance to small, low-risk businesses. So it’s kind of like getting a good-driver discount for your business insurance. Because you work in IT, there’s a good chance you qualify as low-risk. And that means you can likely get lower premiums.
Why BOP Insurance for IT Businesses?
Together, General Liability and Property Insurance cover many of the risks an IT business has. On top of that, BOP Insurance can help you meet the insurance requirements in your client contracts.
Many of the IT businesses we work with are looking for General Liability Insurance, often because a client has required them to get it. Why would a client want you to have business insurance?
Say you’re hired as a freelance developer and need to go into your client’s office for a week. You’re only going to be coding and working with their dev team, so why do they want you to have insurance? Don’t worry: it’s a pretty standard practice. They want protection in case you break anything, hurt anyone, or say something that damages their reputation. Or more realistically: they want someone to push the liability onto if some of the code you write turns out to be lifted from a third party.
That’s the kind of copyright infringement case that the GL portion of your BOP Insurance could cover.
By signing up for a BOP, you can get insurance to meet your contractual obligations – and because you’re bundling your policies together, you can end up saving money on your premiums.
How a Business Owner’s Policy Saves You Money
Earlier, we called a Business Owner’s Policy the “good driver discount” of business insurance. That’s because insurers only sell BOPs to small businesses (those with fewer than 100 employees), which means they’re able to limit their risk pool. When insurers limit their risk, they’re able to charge less for coverage. It’s a win-win.
You can also get lower rates because you’re buying two policies at once – like when you buy Internet and cable together. If you bought your General Liability and Property Insurance separately, you'd probably have to pay more.
The bottom line? A Business Owner’s Policy is a smart way for low-risk tech businesses to get insured.
Qualifying for BOP Insurance
As we mentioned, not every business can get a BOP. In order to qualify, a tech business…
- Must have fewer than 100 employees.
- Can’t have a large office space.
- Can’t need more than 12 months of Business Interruption Insurance (which can replace your income if a storm or fire temporarily shuts down your business).
- Must work in a low-risk industry.
For most small tech businesses, it’s easy to qualify for BOP Insurance. Your work isn’t exactly high-risk, and often, your insurance needs are less than those of industries that require large workplaces.
A Business Owner’s Policy makes a lot of sense for tech professionals who want an agile insurance policy that gives them more coverage for less.