It’s one of the most common, and most expensive, assumptions small business owners make: that their home or auto policy will cover the business. In most cases, it won’t.
Where personal policies fall short
- Homeowners policies usually provide only limited coverage for business property kept at home, often just a few thousand dollars, and typically exclude liability for business activities. A client who slips on your steps during a business visit may not be covered.
- Personal auto policies can exclude or restrict coverage when a vehicle is used primarily for business, such as hauling tools, making deliveries or transporting clients.
- Personal liability coverage doesn’t extend to claims about your work, products or professional advice.
What a Business Owner’s Policy (BOP) covers
A BOP bundles the core coverages most small businesses need into one policy, usually at a lower cost than buying them separately:
- Commercial property: your building (if you own it), equipment, inventory and furniture.
- General liability: bodily injury and property damage claims from customers, vendors and visitors.
- Business income: lost income and ongoing expenses if a covered loss forces you to close temporarily.
BOPs are designed for small and mid-sized businesses such as retail shops, offices, contractors and service providers. Larger or higher-risk operations may need separate commercial policies.
Other coverage to consider
- Workers’ compensation. In Michigan, employers generally must carry workers’ comp if they have three or more employees at one time, or at least one employee who works 35 or more hours a week for 13 weeks or longer.
- Commercial auto. Needed when vehicles are owned by the business or used heavily for work. See commercial auto insurance.
- Professional liability (E&O). For consultants and service providers whose advice or work could lead to a client’s financial loss.
- Cyber liability. For businesses that store customer data or take payments online.
Health insurance for the self-employed
If you work for yourself or run a small team, health coverage is part of the picture too. Depending on your income and team size, a Marketplace plan or a small-group employer plan may make more sense, and the tax treatment differs between them.
Learn more about self-employed health insurance and small business health plans.
Get a business insurance review
Every business is different. We’ll look at how you operate, what you own and who you employ, then compare coverage from multiple carriers. Explore commercial insurance, read the business insurance FAQs, or call (734) 525-9450.