Business owner’s policy requirements

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.

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

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.

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.

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.

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.

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 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.

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.