Business owner's policy
Business owner’s policy (BOP)
A business owner’s policy bundles general liability insurance with commercial property insurance. Many insurers offer small businesses a discount if they choose this policy.
Why do you need a business owner's policy?
A business owner’s policy (BOP) protects your business against financial loss by offering the liability coverage of general liability insurance and commercial property insurance (also known as hazard insurance) in one bundle.
Your landlord or clients might require the general liability coverage that's included in a BOP, while property insurance is vital for companies that own a building or expensive movable property such as equipment, tools, and supplies.
Because a BOP combines two key policies at a discount, it is strongly recommend to small business owners as a smart financial choice.
Eligibility requirements for a BOP
Small businesses that qualify for BOP savings typically have:
- Less than 100 employees
- Low-risk industry factors
- Less than $1 million in yearly revenue
- A small commercial space
Learn more about business owner's policy eligibility requirements.
What does a business owner's policy cover?
A business owner's policy combines coverages from general liability insurance and commercial property insurance into one bundle.
More specifically, a BOP provides coverage for:
Damaged laptops and other equipment
The commercial property insurance included in a business owner’s policy covers the cost of property damage at your business, including laptops and other expensive equipment.
In addition, a BOP's business personal property (BPP) coverage offers protection for items that are used to run a business, such as furniture and machinery.
Accusations of brand infringement or libel
If a client or competitor accuses your business of copyright or brand infringement, a business owner's policy would protect your company from financial loss by covering the cost of a lawsuit and other related legal fees.
A BOP also pays for lawsuits related to claims of spoken defamation (slander), written defamation (libel), invasion of privacy, and other advertising injuries.
Common accidents at your office
The general liability insurance included in a BOP covers the most common third-party accidents and lawsuits. This includes client slip-and-fall injuries at your office, accidental damage to client property, and other lawsuits stemming from injuries and property damage.
Theft and vandalism
The commercial property coverage included in a BOP covers the cost of repairing or replacing your business property after it’s stolen or damaged.
How much does a business owner's policy cost?
BOP policyholders pay on average $57 per month, or $684 a year, for coverage. Your exact cost may be more or less depending on your risks.
The cost of a business owner's policy is based on several factors, including:
- Your business property value
- Your profession’s level of risk
- Policy limits and deductible you choose
- Business location
- Number of employees
- Claims history
What isn't covered by a business owner's policy?
While BOP insurance can help bundle insurance coverage for a number of common business risks, it might not provide all the protection that a small business requires.
Specifically, a business owner's policy will not include coverage for:
Employee discrimination lawsuits
If your small business is sued over claims of harassment, discrimination, and wrongful termination, a BOP would not cover lawsuit expenses and related legal costs. Instead, you'd need employment practices liability insurance (EPLI).
Employee injuries
A BOP covers third-party injuries, but not employee injuries. Workers' compensation insurance covers medical expenses when an employee suffers a work injury. It also pays the employee part of the wages lost during recovery.
Cyberattacks and data breaches
A business owner’s policy does not protect against cyberattacks and data breaches. The appropriate policy for this type of coverage is cyber insurance.
For tech companies, this coverage is often included with errors and omissions insurance in a bundle called technology errors and omissions insurance.
Vehicles used by your company
Though a BOP protects your business property, the coverage does not extend to vehicles.
Commercial auto insurance is required in almost every state for business-owned vehicles. Personal, rented, and leased vehicles used for business purposes should be covered by hired and non-owned auto insurance, as well.
Client payment recovery
If your client records are destroyed by a fire or other incident, your business might need to work overtime to collect missing payments. Property insurance doesn't cover the cost of recovering these payments unless your policy has an accounts receivable endorsement.
Other common questions about a BOP
How do you get a certificate of insurance?
TechInsurance is a trusted insurance expert for all small business owners, including contractors and limited liability companies (LLCs), with extensive knowledge of the IT sector. Our licensed insurance agents are available to answer your questions on different coverage options and help you find the policies that's right for your business needs.
With TechInsurance, you can easily download a certificate of liability insurance for your small business, often on the same day you buy a business owner's policy or other types of insurance products.
This comes in handy for companies and consultants that need proof of insurance to sign a contract or a lease and don’t have time to call an insurance company for documentation. Clients and landlords may ask for a business owner's policy certificate or other types of business insurance to show you’re insured.
What if I want to add more insurance coverage to my BOP?
If your business has higher than average liabilities, you can increase your BOP's policy limit with commercial umbrella insurance. Umbrella insurance raises your maximum coverage limit, so your insurance company will pay for costlier insurance claims.
A business owner's policy doesn't cover every type of commercial liability. Get more complete coverage by bundling your BOP policy with these insurance policies:
- Business interruption insurance: Replaces lost income and pays for extra expenses if property damage causes a temporary disruption in your business
- Business renter's insurance: Protects your rented business space in the event of fire, vandalism, or weather damage
- Contractor's tools and equipment insurance: A type of inland marine insurance, this policy provides protection for business property in transit
- Cyber liability insurance: Provides liability protection against cyberattacks and data breaches that target your small business.
- Hired and non-owned auto insurance (HNOA): Provides liability protection for accidents involving vehicles that your small business rents or uses, but doesn't own
- Electronic data liability coverage: Expands your property damage protection to include data loss caused by accidental damage to a customer's computer, hard drive, or other data storage equipment
- Electronic data processing (EDP) insurance: Covers your electronic data processing equipment, such as computers, against data loss in the event of a power surge, fire, or natural disaster
- Employee dishonesty coverage: Provides protection against employee theft, such as an employee stealing from the cash register
- Errors and omissions insurance, also called professional liability insurance: Protects your business from disputes over the quality of the professional services you provide to your clients
You can also add some types of coverage to a business owner's policy as endorsements, or riders, depending on your insurance company. Talk to a TechInsurance agent to discuss tailoring a BOP to match your insurance needs.
What is the difference between general liability insurance and a BOP?
Commercial general liability insurance protects small businesses from common third-party lawsuits, such as from bodily injury or copyright infringement. It is not bundled with any other policies, though you may endorsements to your general liability coverage.
A business owner's policy bundles general liability insurance with commercial property insurance. It is typically less expensive than if you purchased each coverage separately.
How is a BOP different from a commercial package policy?
A BOP bundles general liability coverage and commercial property insurance into one policy. It is a cost effective choice because it is usually cheaper than buying these insurance products separately. Businesses in low-risk industries with a small number of employees tend to qualify and choose a BOP.
A commercial package policy (CPP) also combines general liability insurance and commercial property coverage, but it allows you to add other liability policies with different limits for each covered loss. You can add endorsements to your CPP for other types of coverages, such as commercial auto insurance and inland marine insurance.
Because a CPP offers more flexibility in terms of the risks covered and their policy limits, it is recommended for midsized businesses and those with higher risks.
What are some exclusions to a BOP?
BOPs have some coverage exclusions. For example, a BOP doesn't usually pay for property damage caused by natural disasters like earthquakes, hurricanes, tornadoes, and floods. If you need insurance coverage for these events, you'll have to add endorsements to your policy.
Your BOP also won't pay for lawsuits involving willful negligence or purposeful copyright infringement – which can be criminal offenses. Intentional customer injury or property damage both fall into the same category and aren't covered losses by the policy.
You can add endorsements to your policy to fill some gaps in your coverage. Check with an TechInsurance agent to make sure your insurance includes the coverage you need.