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March 23, 2021

Who Qualifies for a Business Owners Policy?

A business owners policy is a business insurance policy designed to cover small businesses in low-risk industries at a lower rate. This means that not all businesses can qualify for a business owners policy. It is important to speak with an insurance agent and discuss your business’ specific needs when it comes to finding insurance.a close up of a sign 

What is a Small Business? 

The qualifications for a small business vary by industry. In one industry, ten employees may qualify for a small business while in another, a hundred employees are still considered small business qualified. In general, a small business has under a hundred employees. If you work out of your home or own a single location, you may qualify for small business insurance. 

Other qualifications include: 

  • Making less than $1 million a year in revenue 

  • Needing less than 12 months of business interruption insurance 

  • Having a small area of operation 

Business interruption insurance often comes as part of a business owners policy. This insurance provides compensation if the business is unable to operate for a period of time due to government mandate or disaster. 

What is a Low-Risk Industry? 

Insurance is primarily decided on your risk level. This is the level of risk your business faces of filing a claim on the insurance policy. Business owners policies generally fit low-risk industries. 

High-risk industries may not qualify for a business owners policy. High-risk industries include gambling, legal services, travel, financial services, certain manufacturing and more.  

Low risk industries may include retail, pet supplies, movies, books, beauty, health, home goods and more. 

How Much is Insurance for a Small Business? 

There are many factors that may affect the cost of your business insurance. A business owners policy combines coverages into a comprehensive policy so you can save money, but prices vary widely depending on your location, industry, claims history, credit score and more. Be sure to get quotes from several insurers in your area so you can find the right policy for your business. 

Is There Insurance for Large Businesses? 

Large businesses in high-risk industries can get insurance, although they may not qualify for a business owners policy. Some insurers offer commercial package policies, for example. These policies are similar to business owners policies as they combine coverages, but the limits are often higher and the policy is more flexible to suit the need of a large business. 

If you have questions about your business or your qualifications for a business owners policy, be sure to speak with your insurance agent.

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