Business Owner's Policy (BOP Insurance)

What Is BOP Insurance?

A Business Owner's Policy (BOP) is an affordable insurance package for small businesses that bundles General Liability Insurance and Commercial Property Insurance. Basically, BOP Insurance protects your business by covering some of the most common risks it faces, including…

• Lawsuits over customer injuries or property damage.
• Lawsuits over defamation, copyright infringement, slander, and other advertising injuries.
• Damage to your equipment, furniture, and other business property.

No one expects a customer to sue or a fire to destroy their building, but incidents like these happen every day. In fact, a study by The Hartford shows that more than 40 percent of small businesses will experience an insurance claim in the next 10 years. Business Owner's Insurance makes sure your business can handle whatever comes its way.

What Does a BOP Policy Cover?

Part 1: Liabilities

A Business Owner's Policy includes two fundamental coverages: General Liability Insurance and Commercial Property Insurance.

Let's start with General Liability. This part of your BOP Insurance can cover third-party lawsuits over:

• Property damage (e.g., you spill coffee on a client's laptop).
• Physical injuries (e.g., a customer gets hurt at your store).
• Advertising injuries (e.g., someone accuses you of copyright infringement).

These lawsuits can be expensive, even if your business isn't found liable. How expensive? The Hartford study we mentioned earlier found that customer injury claims cost $30,000 on average.

How do lawsuits get so expensive? To defend yourself, you may have to pay lawyers' fees, court costs, witness fees, police report costs, and judgments or settlements. The General Liability coverage included in your BOP Insurance can pay for those expenses so they don't come out of your pocket.

Liabilities a Business Owner's Policy can't cover: BOP Insurance is not a silver bullet. For example, it won't cover employee injuries (that's a job for Workers' Compensation Insurance), professional errors (you need Errors and Omissions Insurance for that), or data breaches (turn to Cyber Liability Insurance instead).

Part 2: Property

Your BOP's Commercial Property coverage can help pay for business property lost or damaged by:

• Fire.
• Windstorms.
• Theft.
• Vandalism.

For example, if a fire destroys an office you own, your BOP policy may help pay to repair the building and replace its contents.

Some BOPs may also include Business Interruption Insurance. This coverage actually pays your business income, but only in very specific circumstances: if you're forced to close by property damage covered by your Property Insurance (like a fire), Business Interruption Insurance can pay benefits to replace the income you're not able to earn while you're closed.

Property a Business Owner's Policy can't cover: Your BOP Insurance does not cover damage to business vehicles. You'll need Commercial Auto Insurance for that.

Who Needs a Business Owner's Policy?

Many small businesses benefit from a Business Owner's Policy for two reasons:

1. BOP Insurance covers many basic risk exposures small businesses face.
2. Thanks to bundling, the BOP is often cheaper than buying General Liability and Property Insurance separately.

But not all businesses qualify for BOP Insurance. If your business has high-risk operations or is highly specialized, you may need higher liability limits than a BOP can provide. Having a large office or store may also disqualify you.

Complete an application, and Insureon agents will help you choose the best policies for your business.

Business Owner's Policy: Further Reading

BOP Insurance in the Insureon Blog