For many small businesses, a Business Owners Policy (BOP) is the most efficient way to get the core coverage you need at an affordable price. It bundles two essential coverages — general liability and commercial property — into a single policy with a single premium.
Here is what a BOP covers, who qualifies, and when you need more than a BOP.
What Is a Business Owners Policy?
A BOP combines:
General liability insurance. Covers bodily injury and property damage claims by third parties — a customer who slips and falls, damage you cause to a client's property, personal and advertising injury claims.
Commercial property insurance. Covers your business property — your building (if you own it), your equipment, inventory, furniture, and fixtures — against fire, theft, vandalism, and other covered perils.
Business interruption insurance. Most BOPs include business interruption coverage, which pays your lost income and continuing expenses if a covered loss forces you to temporarily close.
By bundling these coverages, carriers can offer a BOP at a lower combined premium than purchasing each policy separately.
Who Qualifies for a BOP?
BOPs are designed for small to mid-size businesses that meet certain criteria. Typical eligibility requirements:
- Annual revenue under $5–10 million (varies by carrier)
- Fewer than 100 employees (varies by carrier)
- Operates from a fixed location (home-based businesses may qualify with some carriers)
- In an eligible industry (some high-risk industries do not qualify)
Industries commonly eligible for BOPs include:
- Retail stores
- Restaurants and food service
- Professional offices (accountants, consultants, real estate agents)
- Service businesses (salons, cleaning services, repair shops)
- Contractors (some trades)
Industries that typically do NOT qualify for BOPs:
- Manufacturing
- Auto dealers
- Financial institutions
- Farms
- High-risk contractors (roofing, demolition)
What a BOP Does NOT Cover
A BOP is a starting point, not a complete insurance program. Common coverages NOT included in a standard BOP:
Workers compensation. Required separately in most states. A BOP does not cover employee injuries.
Commercial auto. Vehicles used for business need a separate commercial auto policy.
Professional liability (E&O). If you provide professional services or advice, you need professional liability coverage. A BOP's GL coverage does not cover professional errors.
Cyber liability. Data breaches and cyber attacks are not covered by a standard BOP. Cyber coverage is available as an endorsement or standalone policy.
Employment practices liability (EPLI). Claims of discrimination, harassment, or wrongful termination are not covered by a BOP.
Flood and earthquake. Standard BOPs exclude flood and earthquake. Separate coverage is required.
BOP Endorsements: Customizing Your Coverage
Most carriers allow you to add endorsements to a BOP to customize coverage for your specific business:
- Cyber liability endorsement: Adds basic cyber coverage
- Equipment breakdown: Covers sudden mechanical failure of equipment
- Hired and non-owned auto: Covers liability when employees drive personal vehicles for business
- Professional liability: Available from some carriers as a BOP endorsement
- Liquor liability: Required for businesses that serve alcohol
BOP vs. Commercial Package Policy (CPP)
For businesses that do not qualify for a BOP or need more customized coverage, a Commercial Package Policy (CPP) is the alternative. A CPP allows you to combine multiple commercial coverages with more flexibility in limits and terms.
A CPP is appropriate when:
- Your business does not qualify for a BOP
- You need higher limits than a BOP provides
- You need coverages that are not available as BOP endorsements
- Your business has complex or unusual risks
What Does a BOP Cost?
BOP premiums vary widely based on:
- Industry and business type
- Revenue and size
- Location
- Coverage limits and deductibles
- Claims history
Typical ranges:
- Small retail or service business: $500–$2,000/year
- Restaurant: $1,500–$5,000/year
- Professional office: $500–$1,500/year
- Contractor (eligible trades): $1,000–$3,000/year
The Bottom Line
A BOP is an efficient, affordable way for eligible small businesses to get core coverage. But it is a starting point — most businesses need additional coverages beyond what a BOP provides.
Talk to a RightQuote advisor about building the right insurance program for your business, or explore business insurance options.
Part of the Small Business Insurance Guide.