Business owner’s policy

The cost of a business owner’s policy (BOP) varies based on several factors related to your business’s risk level, property value, and coverage needs. Insurers use this information during underwriting to estimate the likelihood and potential cost of a claim.

Here are the main factors that typically influence BOP premiums:

• Value of your property and equipment: The more valuable your business property is, the more it costs to insure. A business with expensive equipment, inventory, or furnishings will typically pay more for coverage than one with minimal assets. For example, a restaurant with commercial kitchen equipment will likely have higher property coverage costs than a small consulting office with only computers and desks.
• Type of business: Your industry plays a major role in determining risk. Businesses with higher chances of accidents, property damage, or customer injuries usually pay more for a BOP. For instance, a retail store with regular foot traffic may face higher liability exposure than a freelance graphic designer who works from home.
• Business operations: What your business actually does day-to-day can also affect pricing. Operations that involve physical labor, hazardous materials, or work at client sites may increase risk. For example, a contractor who transports tools to jobsites may have greater exposure to theft or property damage than a bookkeeping service that operates entirely online.
• Business location: Where your business is located can impact your premium. Insurers consider risks such as local crime rates, weather patterns, and the likelihood of natural disasters. A business in an area prone to hurricanes, flooding, or high property crime might see higher insurance costs than a similar business in a lower-risk area since they may need to add coverage endorsements.
• Number of employees: Businesses with more employees may face a higher risk of accidents, injuries, or liability claims. As your workforce grows, insurers may adjust your premium to reflect the increased exposure.
• Policy limits and deductible: Higher coverage limits generally mean higher premiums because the insurer could pay more in the event of a claim. Choosing a higher deductible—the amount you pay out of pocket before insurance applies—can sometimes help reduce your premium. On average, Insureon customers pay a deductible of $500 for a BOP.
• Claims history: If your business has filed multiple insurance claims in the past, insurers may view it as a higher risk and charge more for coverage. On the other hand, a clean claims history can sometimes help keep premiums lower.

Together, these factors help insurers determine the overall risk profile of your business and calculate the cost of your BOP.

Yes. Business owner's policies are flexible. You can add on other coverages, called endorsements, to a BOP to meet your specific needs.

Small business owners often bundle their BOP with other types of business insurance policies, such as:

• Business interruption insurance, also called business income insurance, covers loss of income and day-to-day expenses when there is a temporary disruption in your business operations.
• Equipment breakdown insurance covers costs when equipment that your business depends on, such as a refrigerator or freezer, fails and causes a disruption.
• Business renter's insurance is an insurance bundle that covers your rented business space in the event of fire, vandalism, or weather damage. It is similar to renter’s insurance for apartment occupants.
• Tools and equipment insurance, a type of inland marine insurance, covers business property in transit and stored off-site. It can provide protection for a general contractor or handyman who transports tools and equipment to different jobsites.
• Data breach insurance, also known as cyber insurance, helps e-commerce stores and other businesses recover when a data breach exposes email addresses, credit card numbers, or other customer information.
• Electronic data processing (EDP) insurance covers your business's computers, backup systems, and data in the event of a power surge, fire, natural disaster, or similar incident.
• Electronic data liability coverage protects against legal costs related to accidental damage to a client's computer, hard drive, or other data storage equipment. While cyber insurance usually covers data lost from a targeted software attack, electronic data liability insures a data loss when there’s accidental physical damage to a network or storage device.
• Employee dishonesty insurance protects your business from employee theft, such as an employee stealing from the cash register or forging a check.
• Hired and non-owned auto insurance (HNOA) provides coverage for leased, rented, and personal vehicles that a business owner occasionally uses for commercial purposes like visiting clients.
• Liquor liability insurance protects bars and restaurants if they serve alcohol to an intoxicated person who goes on to cause property damage or harm someone else.
• Ordinance or law coverage helps cover the extra costs required to meet current building codes when damaged commercial property needs to be rebuilt.
• Professional liability insurance, also known as errors and omissions insurance (E&O), protects businesses when a client disputes the quality of a professional service.
• Commercial umbrella insurance extends the limits on your general liability coverage and other types of liability policies, meaning your insurance company can cover more expensive lawsuits. You may need it if you serve large clients or run a high-risk business.