Business Owner’s Policy
Save money with an insurance bundle that covers common lawsuits and property damage.
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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.

Who needs a business owners policy?

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

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 valuable business property. This policy protects against financial losses from customer accidents and incidents like fires and burglaries.

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

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.

What does a business owner's policy cover?

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

Specifically, a BOP will typically cover:

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Third-party bodily injury

If a customer is hurt on your property, the general liability insurance portion of your business owner's policy can help pay for medical expenses or legal expenses in the event of a lawsuit.

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Third-party property damage

The general liability portion of a BOP can help repair or replace damaged customer property. It can also pay legal fees if a customer sues over the damage.

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Product liability

Property damage or customer injuries don't have to happen on you or your client's property. If a business manufactures, distributes, or sells products, it can be sued over the harm those products cause to people or property. Having product liability coverage in a BOP can provide protection from these types of risks.

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Advertising injuries

If someone sues a business owner or employee over an advertising injury, such as libel, slander, or copyright infringement, the liability portion of a BOP can help pay for lawsuit expenses.

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Business property damage

The commercial property insurance portion of a BOP can help pay for expenses to repair or replace your business property if it's damaged by fire, theft, and some weather-related events.

This policy's business personal property (BPP) coverage provides protection for items that are used to run a business, such as furniture and machinery.

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

What does a BOP not cover?

While a business owner's policy can help bundle coverage for a variety of business risks, it does not provide all the protection that a small businesses needs.

Specifically, a BOP will not include coverage for:

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Employee injuries

Workers' compensation insurance is the policy that covers medical expenses, physical therapy, and some lost wages for employees who are injured at work. It's required in most states for businesses that have employees.

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Employee discrimination lawsuits

Employment practices liability insurance (EPLI) can cover lawsuit expenses related to claims of harassment, discrimination, and wrongful termination.

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Vehicles used by a business

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

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Destroyed payment records

If a fire or other incident destroys your customer records, you could have trouble collecting outstanding payments. Commercial property insurance doesn't cover the cost of recovering these payments unless your policy has an accounts receivable endorsement.

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Other common questions about a business owner's policy

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, such as:

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.

Business renter's insurance is a type of insurance bundle that covers your rented business space in the event of fire, vandalism, or weather damage. It is similar to the renter’s insurance that many apartment occupants have.

Contractor's tools and equipment insurance, a form of inland marine insurance, covers business property in transit. It can provide protection for a general contractor or handyman that transports tools and equipment to different job sites.

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.

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.

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 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.

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 is the difference between general liability coverage and a business owner's policy?

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 business owner’s policy, on the other hand, provides this same general liability coverage and also pays for damage or loss of your building, equipment, and inventory.

If your business owns valuable property, consider a business owner's policy. A BOP offers both general liability and commercial property coverage at a lower cost than buying the policies separately. That makes it a smart choice for small business owners.

Learn more about the difference between general liability insurance and a BOP.

How do you get proof of insurance?

Home businesses, freelancers, and small businesses can all benefit from purchasing a business owner's policy.

Business owners can usually get proof of insurance online on the same day that they 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. If your bank or lessor requires other proof of insurance, you can contact an agent for more information.

What are the exclusions from a business owner's policy?

BOPs have some coverage exclusions. For example, a BOP doesn't usually pay for property damage caused by natural disasters like earthquakes, hurricanes, tornadoes, and floods. If you need coverage for these events, you'll need to add a special endorsement to your policy.

A BOP also doesn't pay legal defense costs for lawsuits involving intentional copyright infringement or willful negligence – which can be criminal offenses. Purposeful customer injury or property damage falls into the same category and isn't covered by the policy.

Incidents that involve alcohol are also excluded from a BOP. With a liquor liability endorsement, you can get coverage for these claims.

Check with a licensed insurance agent to make sure your business owner's policy includes all the coverage you need.

Where can I learn more about a BOP?

If you want to learn more about this policy, you can find additional answers in our frequently asked questions about business owner's policies.

If there are any additional questions you have about coverage, or to learn more about which endorsements and policies your small business needs, ask an Insureon agent.

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