BOP Made Easy: Business Owners Policy Explained

What Is a Business Owners Policy?

A Business Owners Policy, also known as BOP, is often the most important policy any small to medium-sized business needs. It combines the protection found in other business insurance coverages and packages it in a customizable policy that suits your specific type of business.

How Does a Business Owners Policy Work?

A Business Owners Policy bundles specific coverages together to form either a standard or specialized policy. The most common components of a BOP are General Liability, Business Property and Commercial Interruption Insurance. This type of policy is most suitable for small to mid-sized businesses. However, there are requirements a company must meet to qualify for this type of coverage. Criteria may vary slightly between carriers, but in general, your business:

  1. Has less than 100 employees
  2. Makes less than $5MM in sales per year
  3. Is in a low-risk industry

What Does a Business Owners Policy Cover?

The specific coverage offered by your Business Owners Policy will depend on the carrier you select as your insurer. Endorsements will further customize your BOP coverage. As mentioned above, you can expect to have the following protection with:

Business Owners Policy-General-LiabilityGeneral Liability. Covers your business’s liability for bodily injury or property damage to another party, whether it’s an individual(s) or other business. This can include medical costs, legal fees and more. Note: If you rent your workspace, landlords will often require you to have a General Liability policy and to list them as an additional insured.

Business Owners Policy-Business InterruptionBusiness Interruption. This coverage can help your business when it is interrupted by a covered loss such as fire, vandalism, mechanical break-down and more. It will pay the lost income and extra expenses of operating at a temporary location while you rebuild.

Business Owners Policy- Commercial PropertyCommercial Property. Helps cover the cost of repairs or replacement of business property that has been stolen, damaged or destroyed. It may also include third party property that is in control or possession of the insured business.

Can I Add Coverage to a Business Owners Policy?

It is possible to customize a Business Insurance policy by adding coverage through endorsements. For example, a sports bar may add Liquor Liability Coverage. A manufacturer will often opt to add Operations/Product Liability Coverage. From Business Auto to Flood Insurance, there are several endorsements you can add to your BOP. A Business Insurance Specialist will be able to tailor your policy to fit your business’s specific needs.

Is a Business Owners Policy Expensive?

A Business Owners Policy bundles coverages and serves smaller, low-risk industries. Therefore, it can save your business money. Comparison shopping through a Business Insurance Specialist can help you compare coverages and rates offered by various insurance companies to save even more. There’s a real potential to save with a Business Owners Policy and many small and medium-sized business seek to purchase one.

Does My Business Need a Business Owners Policy?

Chances are that your business can benefit from a Business Insurance policy. Because of its flexibility and relatively affordable cost, BOP is an asset to many companies. As you see above, there are some requirements for a business to be able to purchase a Business Owners Policy. Make sure you meet the basic needs. Then, call (866) 537-2657 to speak with a Business Insurance Specialist to learn more about how a Business Owners Policy can help your business.


The information in this article was obtained from various sources. This content is offered for educational purposes only and does not represent contractual agreements. No warranty or appropriateness for a specific purpose is expressed or implied.

Posted in Business, Business Insurance, Business Owners Policy, Commercial Property Insurance, General Liability Insurance, Small Business, Special Equipment Coverage Tagged with: , , , ,