The Businessowner’s Policy (BOP)
The Businessowner’s Policy provides property and liability coverage for eligible small businesses.
The Businessowner’s Policy
For many small businesses, the Businessowner’s Policy (BOP) is the first step to being insured. The BOP is a type of packaged policy, written on its own special form, that combines several different insurance coverages into one convenient policy designed for the needs of small business owners.
BOPs provide coverage for both liability and property damage in one convenient policy. It’s an approachable way for many small businesses to get the insurance coverage they need. Once you have coverage for your business under a BOP, you can add any other specialty coverages you may want for your unique exposures.
The BOP provides coverage to help with many distinct risks your business faces – like damages from fire, storms, theft, and other covered perils. For example, it can also help protect your business from liability claims – if someone visited your business and was injured. Many different endorsements are available to add to your BOP, customizing it to your specific exposures and risks.
Who Should Consider Purchasing a Businessowner’s Policy?
Many different small businesses should consider purchasing a BOP to handle their basic commercial insurance needs. If you have a physical location you own or rent where you do business, the BOP can help protect your building and contents.
The BOP can provide coverage for third-party claims of liability – for example, if a customer visits your business and trips and is injured falling. Or, if you have employees, the BOP can provide coverage if an employee accidentally injures a customer. Finally, if your business has assets, you should consider a BOP to provide coverage in case of theft or damage to your assets.
The Insurance Services Office (ISO) defines the eligibility requirements for businesses that may purchase the BOP. Generally, businesses with less than $6 million in annual gross sales with no locations that exceed 35,000 square feet may qualify.
Eligible risks under the BOP can include:
- Apartment buildings and residential condos of any size
- Office buildings less than 100,000 square feet and six stories or less
- Contractors, with some restrictions on payroll and work, performed
- Wholesale and mercantile risks
- Motels less than four stories tall
- Restaurants, grocery stores, and convenience stores
- Self-storage buildings
Some businesses are always excluded from coverage under the BOP by the current ISO restrictions – even if they otherwise meet the size and revenue requirements to use the form. Some excluded businesses include bars, amusement parks, manufacturing firms, parking lots and garages, and banks.
What Does the Businessowner’s Policy Include?
The BOP packages together property damage and liability coverage. There are many different endorsements you can add to your BOP to cover various risks and exposures your business faces. This means you and your agent can work together to review your business operations and practices to find the right coverages for all your exposures.
Take the time to review your business thoroughly – there may be additional endorsements you can include to give your business more coverage.
The BOP provides coverage for property damage, liability, and legal expenses if your business is sued or you need to defend a claim against you. The policy generally includes:
- Commercial Property Damage – Property damage coverage helps to cover your building, inventory, and contents like furniture, office supplies, and equipment. The coverage applies whether you own or rent your commercial space.
- Commercial Liability Insurance – Liability insurance is a critical coverage for any business. If you were to be sued – even if you did nothing wrong – your liability coverage can help defend you and pay damages. Anyone can be sued, even the most careful of businesses.
- Business Income Insurance – Also called business interruption, this coverage can help if you cannot do business because of a covered event.
Other coverages you may consider adding by endorsement to your BOP can include:
- Cyber Insurance – Phishing attempts, data breaches, and ransomware incidents are rising and can be costly and time-consuming to mitigate. Cybersecurity and data breach coverage can help your business notify customers and take remedial actions if a cyber event happens to you.
- Errors and Omissions Insurance – If you are often advising clients in the course of your business, you may want to add professional liability or Errors and Omissions coverage to your BOP to help protect you from claims of negligence or inaccurate advice.
- Liquor Liability Endorsement – If your restaurant sells alcohol, you may need an endorsement for the added liability of serving liquor.
How do I Purchase a Businessowner’s Policy?
There are several options for purchasing a Businessowner’s Policy. Ask your agent for help with finding the right coverage for your needs or go online to review your options. Many different insurance companies offer a version of the BOP, and some offer niche products specially designed for various industries.
Like many insurance products, shopping around to compare rates can help you save money. There may be a carrier with a BOP already designed for your business’s unique needs – compare different carriers or ask your agent for help finding these niche products.