Business Owner’s Policy (BOP) Insurance: Coverage, Costs & Why You Need It

If you run a small business, you probably wear a lot of hats, and insurance shouldn’t be one more headache. A business owner’s policy, or BOP, simplifies coverage by packaging essential protections into a single, streamlined policy built for real-world risks like accidents, property damage, and business interruptions.

What Is A Business Owners Policy?

A business owner’s policy, or BOP, is a type of insurance package that combines several key business coverages into one convenient policy. It’s designed specifically for small to mid-sized businesses that need broad protection but don’t want to juggle multiple separate policies.

At its core, a BOP usually includes general liability insurance and commercial property insurance, and often business interruption coverage, too. It exists to simplify the insurance buying process for business owners, making it easier and more affordable to protect against the most common risks, like accidents, property damage, and lost income due to unexpected events.

If you own a small retail shop, restaurant, office, or other customer-facing business, a BOP may be the most practical and cost-effective way to get the coverage you need.

What Does A BOP Cover?

A business owner’s policy is designed to give small business owners essential coverage in one easy-to-manage policy. While the exact protection can vary by provider, most BOPs include three core components, with the option to add more coverage based on your specific needs.

Property Insurance

This covers damage to your business property, including buildings, equipment, inventory, and furniture, due to events like fire, theft, or vandalism. It often includes both the physical structure (if you own it) and the contents inside. Property insurance can help repair or replace what’s damaged so you can get back to work quickly.

General Liability Insurance

General liability insurance protects your business if someone sues you for third-party bodily injury, property damage, or personal and advertising injury. For example, if a customer slips and falls in your store or claims your marketing harmed their reputation, general liability helps cover legal fees, medical bills, and settlements.

Business Interruption Insurance

Also called business income insurance, this part of your BOP replaces lost income if your business is forced to close temporarily due to a covered event—like a fire or storm. It may also help pay for temporary relocation costs and ongoing expenses like payroll and rent during the downtime.

Optional Add-ons

Many insurers offer additional coverage options that can be added to your BOP, depending on your industry or specific risks. These may include cyber liability insurance (in case of a data breach), crime coverage (for theft or employee dishonesty), and equipment breakdown insurance (to cover the sudden failure of mechanical systems). Adding these helps tailor your BOP to better match your business’s needs.

What Isn’t Covered By A BOP?

While a Business Owner’s Policy offers broad protection, it doesn’t cover everything. There are specific types of risks that require separate policies. Here are some common exclusions:

Workers’ Compensation

A BOP does not cover employee injuries or illnesses that occur on the job. Most states require a separate workers’ compensation policy to handle medical costs, lost wages, and legal expenses related to workplace injuries.

Professional Liability

If your business provides advice, consulting, or professional services, you’ll need professional liability insurance (also called errors and omissions insurance). It protects against claims of negligence, mistakes, or failure to deliver promised services (none of which are covered under a BOP).

Auto Insurance

Vehicles used for business purposes—whether owned by the company or employees—must be insured under a commercial auto policy. A BOP won’t cover accidents, damage, or liability involving business vehicles.

Flood And Earthquake Damage

Standard BOPs exclude coverage for damage caused by floods or earthquakes. If your business is in an area prone to either, you’ll need to purchase separate flood or earthquake endorsements or policies to stay protected.

How Much Does A Business Owner’s Policy Cost?

The cost of a business owner’s policy can vary widely, but most small businesses pay between $500 and $3,000 per year. Several factors influence the final price, including your industry, business size, annual revenue, and physical location.

A retail shop in a busy urban area with foot traffic and expensive inventory might pay on the higher end of that range, especially if they add coverage options like crime or equipment breakdown. In contrast, a home-based IT consultant with minimal property and low foot traffic may pay closer to $500 annually.

A small bakery with a storefront, employees, and equipment like ovens and refrigerators may land somewhere in the middle, depending on local risks and coverage limits. Your rate reflects the type of work you do, how risky it is, and what kind of protection your business needs to keep running smoothly.

Who Needs A Business Owner’s Policy?

A business owner’s policy is ideal for small to mid-sized businesses across a range of industries, especially those with customer interaction or valuable assets to protect. Common businesses that benefit from a BOP include retail shops, restaurants, cafes, contractors, and tech companies.

Whether you own a boutique clothing store, a neighborhood pizza place, or a small IT firm, a BOP can provide essential coverage in one package, making it easier and more affordable to manage your risks.

You likely need a BOP if your business has a physical location, owns inventory or expensive equipment, or regularly interacts with clients or customers in person. These factors increase your exposure to liability claims, property damage, and business interruptions.

Even home-based businesses may need a BOP if they store products or host clients. If something unexpected forces you to close temporarily or if someone sues you for a slip-and-fall, a BOP can be the safety net that keeps your business afloat.

Can You Add Coverage To A BOP?

Yes, you can customize a business owner’s policy by adding endorsements or riders to expand your coverage. While a standard BOP typically includes general liability, property, and business interruption insurance, many insurers allow you to tailor the policy to better fit your business needs.

These endorsements can cover things like cyber liability, employee theft, equipment breakdown, and even data loss. The ability to add these coverages makes a BOP more flexible and useful across a wider range of industries.

In addition to endorsements, many business owners choose to bundle their BOP with separate policies to create a more complete insurance plan. Common additions include workers’ compensation insurance, which is required in most states if you have employees, and commercial auto insurance if your business owns or uses vehicles.

Professional liability insurance (also called errors and omissions) is often added by service-based businesses, such as consultants or accountants, to protect against claims of negligence or mistakes.

Cyber insurance is another growing need, especially for businesses that handle sensitive customer data. Bundling these policies with your BOP can simplify your insurance management while ensuring you have the protection needed for your specific operations.

Eligibility Requirements For A BOP

Not all businesses qualify for a business owner’s policy. BOPs are primarily designed for small to mid-sized businesses that meet certain risk and size criteria. Insurers typically look at factors such as your industry, number of employees, annual revenue, and physical footprint.

Low-risk businesses, like small retail stores, offices, and service providers, are more likely to qualify. High-risk operations, such as large manufacturing facilities, bars, or businesses with complex liability exposures, are usually ineligible and must purchase separate policies instead.

To be eligible, most insurers require that your business operates in a low-risk industry, has fewer than 100 employees, and generates less than $5 million in annual revenue. You typically need to operate out of a physical location, such as a storefront or office, and not engage in high-hazard activities.

BOP Claims Examples

Here are three quick examples of real-world BOP claims to help illustrate how coverage works in everyday situations:

Water Damage In A Bakery

A small bakery suffered severe water damage when a pipe burst overnight, flooding the kitchen and storage areas. The property insurance portion of the BOP paid for cleanup, repairs to the building, and replacement of ruined inventory. Business interruption coverage also helped cover lost income during the two-week closure.

Customer Injury In A Retail Store

A customer tripped over a loose rug in a boutique and fractured their wrist. The store owner filed a claim under the general liability portion of their BOP, which covered the customer’s medical bills and a portion of the legal settlement after the injured party sued.

Fire Destroys Inventory

A fire in a small electronics shop damaged most of the merchandise and part of the building. The BOP’s property insurance paid for the structural repairs and replacement inventory. Business interruption insurance covered payroll and helped the owner pay rent until the store reopened three weeks later.

BOP vs General Liability: What’s The Difference?

While general liability insurance covers the basics, a business owner’s policy (BOP) goes further by combining liability protection with property and income coverage in one package. Here’s a clear comparison between a business owner’s policy (BOP) and standalone general liability insurance:

A BOP is a better choice when your business owns or rents a physical location, relies on equipment or inventory, or needs protection from income loss due to unexpected closures. It offers more comprehensive coverage than general liability alone and is often more affordable than buying separate policies.

General liability is one component of a BOP—so if you have a BOP, you already have general liability coverage built in. However, if your business doesn’t need property protection or business interruption coverage, a standalone general liability policy might be sufficient. For broader protection, though, a BOP offers a more complete and efficient solution.

Best BOP Providers

Several top-rated insurers offer business owner’s policies tailored to small and mid-sized businesses. Each provider has its strengths depending on your industry, budget, and coverage needs. Here’s a quick overview of some of the best options:

• Progressive – Known for flexible policies and competitive pricing, Progressive offers BOPs through its network of partners. It’s a solid choice for retail, contractors, and food service businesses.
• NEXT Insurance – A digital-first insurer built for small businesses, NEXT offers fast online quotes and bundled BOP coverage with general liability and property insurance. Great for consultants, freelancers, and sole proprietors.
• The Hartford – A highly reputable carrier with strong financial backing, The Hartford’s BOP is customizable and includes industry-specific options. Especially good for professional offices and retail.
• Hiscox – Offers tailored BOPs for very small businesses and solo entrepreneurs, with options to include professional liability and cyber coverage. Particularly suited for home-based or online businesses.
• Chubb – Known for high-limit, broad-coverage policies, Chubb’s BOPs are ideal for more established small businesses that want premium protection, especially in industries with higher-value assets.

Each of these providers offers something different, so it’s worth comparing quotes and coverages through Insuranceopedia to see which aligns best with your specific business type and risk profile.

How To Buy A Business Owner’s Policy

Purchasing a BOP doesn’t have to be complicated, as long as you know what to look for and how to shop smart.

What To Look For In A Provider

Choose a provider with strong financial ratings, positive customer reviews, and experience working with your type of business. Look for flexible coverage options, easy claims handling, and the ability to add endorsements that fit your needs.

Online Brokers Vs. Direct From Insurers

Online brokers let you compare quotes from multiple insurers in one place, which saves time. Buying directly from an insurer like Hiscox or The Hartford may offer better service continuity, especially if you want to bundle other policies.

How To Compare Quotes

Don’t just look at the price, compare coverage limits, exclusions, deductibles, and included endorsements. Make sure you’re comparing apples to apples across providers to find the best value, not just the cheapest premium.

Questions To Ask An Agent

• What does this BOP specifically include and exclude?
• Can I add coverage for cyber, flood, or employee theft?
• How are claims handled, and how quickly are they paid out?
• What discounts are available if I bundle with other policies?

Asking the right questions helps ensure the policy fits your business and doesn’t leave you exposed.

What Other Business Insurance Policies Do You Need?

A business owner’s policy provides a strong foundation, but many businesses need additional coverage to stay fully protected. Here are some common policies often added alongside a BOP:

• Workers’ Compensation Insurance – Covers medical costs and lost wages if an employee is injured or becomes ill due to work-related duties. Required in most states if you have employees.
• Professional Liability Insurance – Also called errors and omissions (E&O) insurance, it protects your business if a client claims your service caused financial harm due to a mistake or oversight.
• General Liability Insurance – Included in most BOPs but available as a standalone policy. Covers third-party bodily injury, property damage, and advertising injury.
• Cyber Insurance – Helps pay for costs related to data breaches, cyberattacks, and recovery efforts if your business stores sensitive customer data or relies on technology.
• Business Equipment Protection – Pays for repair or replacement of essential equipment or tools that break down or are damaged unexpectedly.
• Commercial Property Insurance – Often part of a BOP but also sold separately. Covers buildings, inventory, and contents against risks like fire, theft, and vandalism.
• Commercial Umbrella Insurance – Provides extra liability protection beyond your existing coverage limits, ideal for businesses with high exposure to lawsuits or large claims.