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Business Owners Policy | B.O.P.

A business owners policy may include commercial property and general liability coverage. Having to obtain multiple different policies becomes complicated and costly so business owners may opt to purchase a bundled business owner's policy.

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Eric Stauffer is a former insurance agent and banker turned consumer advocate. His priority is to help educate individuals and families about the different types of insurance they need, and assist them in finding the best...

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UPDATED: Jul 27, 2020

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Business StorefrontBusiness owners may find themselves needing a variety of insurance products, including commercial property and general liability coverage.  Purchasing so many separate types of policies can become complicated and costly, which is why some business owners prefer to purchase a bundled “business owner’s policy” instead.  Although these policies are not the right choice for everyone, they can be a perfect solution for many small businesses.

What Does a Business Owners Policy Cover?

Business owner policies, or BOPs, are generalized insurance policies offered to small business owners.  In general, your company must employ fewer than 100 people to qualify, as larger companies will require more extensive coverage.

A BOP covers many of the things a specialized policy would cover:

  • Structure damage for the company building
  • General liability claims
  • Equipment breakdown protection
  • Professional liability, including protection for libel and slander
  • Rented vehicle coverage

You may be able to pick and choose among these coverage types to craft a policy that will suit your company’s needs.  For example, if you operate a storefront, you will need different coverage than if you operate out of your home.  Understanding these coverages enables you to tailor the policy to fit the needs of your business, and an insurance representative can help you create the right bundle.

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Who Needs a BOP?

Small business owners who do not plan to purchase separate commercial insurance policies should consider buying a BOP.  Although the protection offered by a BOP is not as thorough as that offered by more specialized policies, it does provide coverage against many common perils at a reasonable cost.

In order to qualify for a BOP, your business will need to fit within certain size parameters.  In addition to having less than 100 employees, the organization must make less than $5 million in annual profits.  Businesses larger than this will require more protection than a BOP will provide.  If you run a very small business as a sole proprietor or partnership, the BOP may be overkill. You’ll need to speak with your insurance company to confirm how much coverage you really need.

How Much Do They Cost?

In general, a BPO will be more affordable than holding multiple separate types of insurance.  For example, a business owner might need to buy a commercial property policy, a general liability policy and a professional liability policy.  If you purchase a BPO, you can have all three in one.  This can help keep costs down.

The exact price of your BPO will depend on your risk level, the amount of coverage you purchase, and other factors.  To determine the actual cost of the policy, you’ll need to obtain a personalized quote that will take all of these factors into account.  That way, you can be assured that you’re getting the coverage you need at a price that will fit within your organization’s budget.

About Eric Stauffer

Author: Eric StaufferI am a former insurance agent and banker turned consumer advocate. My priority is to help educate individuals and families about the different types of insurance they need, and assist them in finding the best place to get it.

3 Comments

  1. I would love to talk about my options and your input about things.

    Reply
  2. Hi!

    Is there a way to get BOP insurance reviews without giving away all kinds of personal information? I just want to know which insurance is recommended and which one I should stay away from.

    I know how insurances work and I really don’t like to be called 25 times a day after I have given away my phone number.

    I would really appreciate some advice.

    Thank you very much!

    Tina

    Reply
    • Hi Tina,

      I would recommend finding a local business insurance broker that writes policies for multiple companies. They will be able to run your application through different firms and act as a single point of contact.

      The unfortunate part about business insurance is its not very standardized and its difficult to get accurate quotes without giving personal info. Each business can vary so dramatically, and they need to see the details of each one to be accurate with their risk assessment.

      Best,
      Eric Stauffer

      Reply

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