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Business owner’s policy requirements
Insureon’s licensed agents typically recommend a business owner’s policy for its coverage and affordability. Learn which businesses are eligible, how to take advantage of a BOP's flexibility, and when a business needs one.
What is a BOP insurance policy?
A BOP bundles general liability insurance with commercial property insurance into one policy. This policy protects against common lawsuits, such as damage to customer property or a client slipping in your office. It also protects your own business property from common property damage risks.
View video transcript.
[video: an animated header displays the Insureon logo. Underneath it, a subheading displays the text: "What is a business owner's policy (BOP)?"]
MALE VOICEOVER: One of the most common commercial insurance policies, a business owner's policy or BOP is not only customizable to your unique business needs, it can often be more affordable than buying each coverage separately.
[video: an illustrated header displays the text: "A BOP is:"]
[video: Under above header, three bullet points display the text: "Affordable"; "Customizable"; "Great for small businesses"]
A BOP typically bundles general liability and commercial property insurance together, but you can also add endorsements to meet your business's coverage needs. Let's take a look at why a BOP is a smart choice for small business owners.
[video: an illustrated header displays the text: "A business owner's policy bundles:"]
[video: Under above header, two bullet points display the text: "General liability insurance" and "Commercial property insurance"]
General liability insurance protects your business from third-party lawsuits over bodily injuries and property damage. Should a customer slip and fall in your store and sustain an injury, you are covered.
[video: an illustrated header displays the text: "General liability protects against:"]
[video: Under above header, three bullet points display the text: "Customer or client injuries"; "Third-party property damage"; "Advertising & personal injuries"]
Commercial property insurance compensates your business if your assets are lost or damaged by incidents, such as fire and theft.
[video: an illustrated header displays the text: "Commercial property covers:"]
[video: Under above header, three bullet points display the text: "Business-owned property"; "Supplies & equipment"; "Inventory"]
These two policies are often required by landlords when signing a commercial lease and are usually the first types of insurance that small business owners will purchase. By getting both policies in a BOP, you get the coverage you need at a lower cost than buying each of them separately.
A business owner's policy can also be tailored to meet your specific insurance needs, from business interruption insurance to data breach coverage to liquor liability insurance.
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[video: Under above header, four bullet points display the text: "Business interruption"; "Contractor's tools & equipment"; "Data breaches"; "And more..."]
To qualify for BOP savings, businesses typically must operate in a low-risk industry, have fewer than 100 employees, make less than $1 million in annual revenue, and maintain a small commercial space.
[video: an illustrated header displays the text: "To qualify for a BOP, you must have:"]
[video: Under above header, four bullet points display the text: "A lower-risk industry"; "Less than $1M in annual revenue"; "A small commercial space"; "Fewer than 100 employees"]
While it's not often required by law, a business owner's policy is a wise choice for small businesses that work with the public and own valuable business property.
Get free business owner's policy quotes with Insureon today.
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Who is eligible for BOP coverage?
Businesses in low-risk industries with a small footprint often qualify for a business owner’s policy, which combines general liability insurance with commercial property insurance at a discount. The typical business that is eligible for a BOP:
- Has fewer than 100 employees
- Has a small office, workplace, or other premises
- Makes less than $1 million in annual revenue
- Operates in a low-risk industry
- Needs less than 12 months of business interruption insurance
Business interruption insurance protects against forced closure
As a part of the property insurance portion of your BOP, business interruption insurance protects against loss of income or an unexpected closure caused by a covered event.
Also called business income insurance, business interruption coverage can help pay for revenue the small business lost as a result of the incident. For example, if a storm damages a bakery storefront and the repairs take a month, business interruption insurance reimburses the bakery for its lost income.
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What do you need in a business owner’s policy?
Common business risks based on your industry and location will dictate the the types of coverage you need for your small business. While a BOP typically provides both liability and property coverage for your business, your policy limits and endorsements will ultimately determine the extent of your policy's coverage.
Your policy limits should match your needs
A BOP has a cap on policy coverage limits, which is why it is more appropriate for a small business. The limit is the maximum amount that your insurer will pay on a claim or during the insurance policy period.
Your general liability insurance should be able to cover the cost of a potential lawsuit. Your property insurance should have limits that match the value of your business personal property so you can get reimbursed appropriately after a fire or other loss.
Add endorsements to expand what your business owner's policy covers
Even with the right business insurance policy, your coverage may contain exclusions to common risks that your industry or type of business might face.
To customize your BOP so that it meets your specific insurance needs, you can add certain coverage options via business insurance endorsements. Contact a licensed Insureon agent who specializes in your industry to discuss optional coverages that match your business.
Some common examples of additional coverage that businesses might add include:
- A contractor who transports tools and equipment to different job sites could add inland marine insurance to protect property in transit.
- A restaurant owner could add a liquor liability endorsement to protect against the actions of intoxicated customers.
- A tax preparer who stores sensitive client information on his computer could add cyber insurance to protect against a data breach or cyberattack.
- An insurance agent could add E&O insurance (also called professional liability insurance) to provide coverage for potential legal defense costs related to work performance, such as failure to procure the right coverage for a client.
When does a business need a BOP?
A client contract or commercial lease may require a business to obtain the general liability insurance included in a business owner’s policy. Though property insurance isn’t required, it's highly recommended for a business that owns a building or valuable equipment.
General liability insurance may be needed for a lease or contract
A client might require general liability coverage in the terms of a contract, or a landlord might include it as a requirement in a commercial lease.
The general liability insurance portion of a BOP offers liability protection for:
- Slip-and-fall accidents and other bodily injury
- Product liability
- Third-party property damage
- Advertising injuries, such as copyright infringement
General liability insurance coverage proves you can run your business and pay your bills – even in the midst of a lawsuit.
Property insurance protects your building and equipment
Property coverage isn't required by law unless you have a loan secured on a piece of commercial real estate. Still, it's an important coverage, even for companies that run out of the small business owner's home. Property insurance covers the tools, computers, and buildings owned by a business.
This policy is vital in preventing one accident from destroying your investment, including protection against property damage from fires, thefts, vandalism, and natural disasters.
How to get BOP insurance quotes from trusted carriers with Insureon
Complete Insureon’s easy online application to find business owner’s policy quotes from top-rated U.S. companies. Once you find the right policy for your small business, you can begin coverage in less than 24 hours.
Once you have you coverage, you can also contact an insurance agent to make sure you have all the small business insurance and types of coverage that your business needs.
Verified BOP coverage reviews
Hear from business owners like you who purchased a BOP.
Updated: February 23, 2024
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