Do Business Owners Policies Cover Employees?

A business owners policy (BOP) combines coverage for small businesses to protect against certain dangers, but it can also serve to cover employees depending on what coverage is added.

Basic BOPs come with two coverages:

• General Liability Insurance: General liability insurance covers claims against the business concerning bodily injury, property damage and personal and advertising injury. For example, say your social media professional posts a tweet about a competitor and is accused by said competitor of libel. General liability insurance can cover your social media employee as well as your overall business.

• Commercial Property Insurance: Commercial property insurance covers the physical assets of your business in case they are damaged due to fire, wind, hail, lightning, smoke, theft, vandalism and more. This may cover some employee’s belongings if they are damaged within the property, but not always.

There are specific coverages you can add to protect your employees or otherwise cover them under insurance. This includes:

• Professional Liability: Professional liability insurance covers claims of professional negligence filed against your business or the professionals you employ. If one of your professionals is sued for a mistake they make while providing a specialized service, professional liability insurance can cover related costs such as court fees and settlement expenses. This is often provided by businesses for their specialist and is also known as Errors and Omission insurance (E&O insurance) or medical malpractice insurance.

• Directors and Officers Insurance: Directors and officers insurance protects the key employees of your business in case they are sued for their activities under your employment, such as claims of fraud and misrepresentation. This insurance can also cover claims from other employees (current, former and prospective) regarding discrimination, sexual harassment, mismanagement of employee benefits, wrongful firing or hiring and more.

• Crime Insurance: In the unfortunate case where an employee may steal from your business, crime insurance covers the cost of the loss for your business.

• Business Interruption Insurance: Business interruption insurance may come as part of your commercial property insurance policy, but it is important to make sure that it is included in your BOP. This insurance can cover your business’ income while it is unable to operate due to a disaster or government mandate. This can also include coverage for employee wages.

Of course, the main employee coverage that is often purchased separately is workers compensation. Workers compensation is required in most states and offers coverage for employees who are injured on the job.