A Business Owners Policy is the single most cost-effective insurance product for small businesses. It bundles the two coverages every business needs — general liability and commercial property — into one policy at a discount.
If you're a small business owner and you don't have a BOP, you're either paying too much for separate policies or you're not covered at all.
What's Included in a BOP
General Liability
The liability side of your BOP covers the claims that hit small businesses most often:
- Customer injuries: Slip-and-fall, trip-and-fall on your premises
- Property damage: Your operations damage someone else's property
- Products-completed operations: A product you sell or service you perform causes harm
- Personal and advertising injury: Libel, slander, copyright infringement
- Medical payments: Small injury payments without a lawsuit ($5,000–$10,000)
Standard BOP limits: $1M per occurrence / $2M aggregate. Higher limits available. For more details, see our complete GL guide.
Commercial Property
The property side covers your physical assets:
- Building: If you own the building (replacement cost)
- Tenant improvements: Build-out and modifications to leased space
- Business personal property: Furniture, equipment, inventory, supplies
- Signs: Interior and exterior signage
- Electronic data: Cost to restore data lost due to a covered event
Business Interruption
Included in most BOPs at no additional charge. If a covered event (fire, storm, etc.) forces you to close temporarily, business interruption covers:
- Lost revenue during the closure
- Continuing expenses (rent, loan payments, payroll)
- Extra expenses to operate from a temporary location
This is the coverage that keeps businesses alive during recovery. 40% of businesses that suffer a major loss never reopen — business interruption coverage is a major reason why the other 60% survive.
Equipment Breakdown
Covers mechanical and electrical failure of equipment — something standard property insurance does NOT cover. Includes HVAC systems, computers, refrigeration, and manufacturing equipment.
Employee Dishonesty
Covers theft by employees — typically $5,000–$25,000 in coverage included in the BOP. Higher limits available as an endorsement.
What a BOP Does NOT Cover
A BOP is a great foundation — but it's not everything. You still need:
- Workers compensation: Required separately if you have employees. See our workers comp guide.
- Commercial auto: Vehicles used for business need separate commercial auto coverage.
- Professional liability (E&O): BOPs don't cover claims from professional advice or services. See our E&O guide.
- Cyber liability: Most BOPs don't include adequate cyber coverage. Available as an endorsement or standalone policy.
- Flood and earthquake: Excluded from all standard property policies including BOPs.
- Health insurance: Employee benefits are completely separate from commercial insurance.
Who Should Get a BOP?
A BOP is ideal for:
- Retail stores
- Restaurants and food service
- Professional service firms
- Beauty salons and barbershops
- Janitorial and cleaning services
- Small offices and home-based businesses
- Small to mid-size service businesses
BOP vs. Separate Policies: The Math
For a typical small retail store:
- Separate GL policy: $1,200/year
- Separate property policy: $1,500/year
- Total separate: $2,700/year
- BOP (bundled): $2,200/year
- Savings: $500/year (18%) PLUS business interruption and equipment breakdown included
The math almost always favors a BOP for businesses that qualify.
Common BOP Endorsements
- Hired and non-owned auto: If employees use personal vehicles for work. Learn more.
- Cyber liability: Data breach coverage — increasingly important for all businesses
- Employment practices liability: Wrongful termination and discrimination claims
- Professional liability: Some carriers allow E&O to be added to a BOP
- Liquor liability: For restaurants and bars that serve alcohol
- Food spoilage: For restaurants and food service businesses
How to Get the Best BOP
- Work with an independent agent: BOP pricing varies significantly between carriers — an agent with access to 50+ carriers finds the best combination
- Accurate property valuation: Underinsured property costs you at claim time. Overinsured property wastes premium dollars.
- Review endorsements: Start with the base BOP, then add only the endorsements you actually need
- Annual review: As your business grows, your BOP needs to grow with it — or transition to separate policies