Business Owner’s Policy
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Business owner’s policy

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Business owner’s policy

A business owner’s policy (BOP) bundles general liability insurance with commercial property insurance. It typically costs less than if the policies were bought separately.

Does your small business need a BOP?

If you own or rent a workspace, you likely need a business owner’s policy.

Most small businesses need general liability insurance and commercial property insurance when they rent or own an office or other commercial space. On top of that, client contracts often require general liability coverage.

Even when coverage isn’t required, a BOP is a wise choice for small businesses that work directly with the public and own property. This policy protects against financial losses from customer accidents and incidents like fires and burglaries.

A BOP is specifically designed for low-risk small businesses. If you qualify, your business saves money and gains coverage for the most common claims.

What does a business owner's policy cover?

A business owner's policy includes both general liability insurance and commercial property insurance, sometimes called business hazard insurance. Together, they provide liability and property coverage for your small business.

General liability insurance

General liability insurance covers the cost of lawsuits from people outside your business who sue over bodily injury or property damage. It also pays legal costs related to advertising injuries, including defamation and copyright infringement.

Businesses that lease commercial space, have a mortgage, or work with expensive client property are often required to carry this type of coverage.

Commercial property insurance

Commercial property insurance pays for repair or replacement of damaged, destroyed, or stolen business property. That includes your commercial space (if you own it), supplies and equipment, and product inventory.

Businesses with assets vulnerable to fires, burglaries, and physical damage benefit from this insurance coverage.

Read more about business owner’s policy coverage.

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Is your business eligible for a business owner's policy?

Probably – but not all types of businesses are eligible. To qualify for BOP savings, businesses typically must have:

  • A low-risk industry
  • Fewer than 100 employees
  • Less than $1 million in annual revenue
  • A small commercial space

Read more about business owner’s policy eligibility.

Should you purchase a BOP or just general liability insurance?

If your business owns valuable property, consider a BOP. A business owner’s policy provides general liability coverage and also pays for damage or loss of your building, equipment, and inventory.

Businesses that interact with the public rely on a general liability policy to cover third-party lawsuits over bodily injuries and property damage. But this insurance doesn’t provide coverage for fire, theft, and other incidents that damage or destroy your property.

A BOP offers both types of coverage at a lower cost than buying the policies separately. That makes it a smart choice for small business owners.

Learn more about choosing between the two business insurance policies.

How does a BOP protect your business?

A BOP can pay for your legal fees during a lawsuit. It also covers repair or replacement of damaged or lost property.

Here are a few situations where home businesses, freelancers, and small businesses benefit from this policy:

Home businessFreelancerSmall business
Liability protectionA courier trips on your uneven porch while delivering a package and sues over the injury.A client asks you to provide a certificate of liability insurance in case you damage equipment at their office.Your commercial lease requires general liability insurance.
Advertising injury protectionA competitor accuses you of libel after you share an unflattering post on social media.A photographer sues for copyright infringement after you use a licensed image on your website.A class-action lawsuit accuses your business of failing to protect your clients’ right to privacy.
Business property protectionA home fire destroys your business’s product inventory.A criminal steals your computer.Extreme weather damages your office building.

How do you get proof of general liability insurance?

You can usually get proof of insurance online on the same day you start a business owner’s policy through Insureon.

It can take several weeks for a traditional insurance agency to send a certificate of commercial liability insurance to new customers. That’s an issue for business owners who need immediate proof of insurance to sign a pending contract.

With Insureon, you can quickly provide proof for the lease or contract you’re planning to sign.

How much does a business owner’s policy cost?

Business owner’s policies cost an average of $57 per month. This is based on the median cost of a business owner's policy. And 12% of Insureon's small business customers pay less than $33 per month for this policy.

Your cost is based on a few factors, including:

  • Amount of coverage
  • Business property value
  • Industry and business operations
  • Business location
  • Number of employees

Is it possible to add coverage to a BOP?

Yes. Business owner's policies are flexible. You can add additional coverages, also called endorsements, to your BOP insurance to meet your specific needs.

Many businesses bundle their BOP with other coverage options:

Business interruption insurance (also known as business income insurance) covers loss of income and extra expenses when there is a temporary disruption in your business operations.

Data breach insurance (also known as cyber liability insurance) helps retail stores and other businesses recover when a data breach exposes customer data like credit card numbers.

Hired and non-owned auto insurance (HNOA) provides coverage for leased 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.

Professional liability insurance (also known as errors and omissions insurance or E&O) protects businesses when a client disputes the quality of a professional service.

Employee dishonesty insurance protects your business from employee theft, such as an employee stealing from the cash register or forging a check.

Electronic data processing (EDP) insurance helps cover your electronic data processing equipment, such as computers and backup systems, against data loss during a power surge, fire, natural disaster, or similar incident.

Electronic data liability coverage expands your property damage coverage to include a loss of data caused by accidental damage to a customer’s computer, hard drive, or other data storage equipment. While cyber liability 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.

If you serve large clients or run a high-risk business, you can add commercial umbrella insurance to your business owner’s policy. Umbrella insurance extends your maximum general liability limits, meaning your insurance company can cover more expensive lawsuits.

What other policies are essential for small businesses?

Most states require these policies for businesses that have employees or a company vehicle:

Workers' compensation insurance covers medical expenses and lost wages for work-related injuries and illnesses. It’s typically required as soon as you hire your first employee.

Commercial auto insurance provides coverage for business vehicles. It’s required when your business owns the vehicle or you use it primarily for work.

To find out which endorsements and policies your small business needs, ask an Insureon agent.

Updated: August 5, 2022
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