Business Owner’s Policy (BOP)
General liability and commercial property insurance in one cost-effective package for small and medium-sized businesses, from pharmacies to groceries.
What Is a Business Owner’s Policy (BOP)?
A Business Owner’s Policy (BOP) combines two critical types of insurance—General Liability Insurance and Commercial Property Insurance—into one comprehensive package. This makes it easier and more affordable to protect your business from a variety of common risks, such as property damage, lawsuits, and loss of business income. Some policies also offer additional coverages, like Cyber Liability or Business Interruption Insurance, making a BOP one of the most versatile insurance options for business owners.
What Does a Business Owner’s Policy Include?
A typical BOP includes the following coverages:
Covers bodily injury, property damage, and personal/advertising injury. For example:
If a third party is injured on your property, it covers medical expenses and legal fees if you’re sued.
If you accidentally damage a customer’s property, this can cover repair or replacement costs.
Covers defense costs if a customer sues you for claims like slander.
Protects owned or leased property, including buildings, equipment, furniture, and inventory. Note that some losses, like those from flooding, are usually excluded, so additional flood insurance may be necessary in certain locations.
Also known as business income coverage, this helps cover ongoing expenses, like payroll, if an event disrupts operations.
Which Businesses Benefit from a BOP?
A BOP is ideal for businesses that:
- Own property or equipment at risk of damage or theft
- May face lawsuits due to bodily injury or property damage
- Operate in various sectors, including retail, restaurants, beauty salons, repair shops, and professional offices
Additional Policies to Consider with a BOP
You may want to expand your BOP with these coverages:
Provides medical benefits and wage replacement for employees injured on the job; often required if you have multiple employees.
Covers vehicles and drivers for business purposes; it may be combined with your BOP for convenience.
Protects expensive machinery, such as HVAC systems or computers, against damage from surges or breakdowns.
Helps cover costs from a data breach, including notifying customers and credit monitoring.
Protects against claims of negligence or professional errors, especially for businesses that offer expert advice.
Exclusions in a Business Owner’s Policy
While comprehensive, BOPs exclude certain risks, often offering either:
Covers all risks except those specifically listed as exclusions.
Covers only the perils specified in the policy.
Common exclusions include:
- Natural disasters like floods and earthquakes
- Government actions, criminal acts, and fraud
- Computer errors or omissions
- Wear and tear or poor maintenance
Business owners may need additional policies to cover these exclusions.
Who Qualifies for a BOP?
BOPs are designed for small and medium-sized businesses that meet specific criteria, often based on annual sales, size, and number of employees. For example:
- Commercial buildings must generally be under six stories or 100,000 square feet.
- Wholesalers and processors may qualify if buildings are under 35,000 square feet.
- Some insurers may set a revenue cap, like $5 million annually, for eligibility.
Cost of a Business Owner’s Policy
A typical BOP costs between $500–$700 per year, depending on:
- Business size and employee count
- Annual revenue
- Business type and associated risks
- Selected deductibles and coverage limits
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