The Ultimate Guide to Business Owners Policies (BOP)​

If you own a small or medium-sized business, you’ll need to know the best type of business insurance to cover you should the worst happen. With so many different options for insurance for your company, finding the best business insurance can often be confusing. In this post, we explain what a business owners policy is, who needs it and talk about the different things a BOP will cover.

Quick References

• What is Business Owners Insurance?
• What is Included in a Business Owners Policy?
• What Are the Different Types of Business Owners Insurance?
• Business Owners Insurance Summary
• Other Insurance Types

What is Business Owners Insurance?

Business Owners Insurance also referred to as BOP is a special type of insurance for a company that combines liability cover and commercial property insurance into a single insurance policy. It is most popularly used by small to medium-sized businesses and contractors.

What is Included in a Business Owners Policy?

Business Owners Insurance will combine commercial property coverage, business liability coverage, and business income coverage into a single comprehensive insurance policy. It can cover a business against any claims that are related to personal and advertising injury, along with property damage and claims of bodily injury. It will also cover your company assets and inventory from damage and theft, along with some external items such as company signage, landscaping, and fencing.

How Much Does a Business Owners Policy Cost?

The cost of a business owners insurance policy can range on average, from between $400-$2200 a year. However, when you consider the two different types of cover that are included with a BOP, namely general liability and commercial property insurance; the individual costs of these policies if purchased in isolation of one another could easily cost anything up to $3000 per year on average, but it could be higher.

Who is Eligible for Business Owners Insurance?

Companies that belong to low-risk sectors with a small footprint will typically qualify for a BOP insurance policy. The usual requirements for a company to be eligible for business owners insurance are as follows:

• Have less than 100 members of staff
• Operates in a low-risk industry
• Has a small business premise
• Generate under $5 million in revenue
• Requires under 1 year of business interruption cover

Every business insurance company will have slightly different requirements; it is important to check your eligibility for BOP with a number of different business insurance companies.

What Are the Different Types of Business Owners Insurance?

A standard business owners policy will combine a number of individual business insurance cover types; such as general liability, business income, and commercial property cover. There are many types of BOP insurance coverage options, and the specific elements will depend on the company you choose to buy business insurance from.

1. Commercial Property Cover will help to provide insurance for your assets, inventory, and your building.
2. Business Income Insurance will allow you to pay your staff and your bills in the case of a temporary company closure.
3. General Liability Insurance will provide coverage for any liability your business may have. It can cover bodily injury, medical expenses, and property damage that both you and your employees are legally accountable for.

What Extra Insurance Can Be Included with A Business Insurance Policy?

There is a range of additional coverage options for your business insurance policy. Here are the most popular, with a short summary of each.

Cyber Liability Coverage

This can provide business insurance against attacks to your company data and your IT systems.

Accounts Receivable Insurance

This business insurance will protect against any losses from invoices that are unpaid.

Rented Vehicles

This is a type of additional business insurance that offers liability coverage for any vehicles that you borrow, hire or lease.

Equipment Breakdown

This business coverage will specifically help to pay for the costs of any breakdown or repairs to your company equipment.

Employment Practices Liability Coverage

This is a business insurance add-on that covers your company for any wrongful acts that arise from the employment process.

Personal and Advertising Injury

This business coverage will specifically cover you for any libel, copyright infringement, or slander.

What Is the Difference Between General Liability Coverage and Business Owners Insurance?

The main difference between business owners insurance and commercial general liability coverage is the general liability will only cover liability losses, whereas a BOP will cover you for liability and provide you with additional commercial property cover.

Business Owners Insurance Summary

If you are thinking about buying a business insurance policy for your company, you should always evaluate the different types of policies in detail. Some BOP coverage will be tailored to your sector, and this can often include a range of useful add-ons that are connected to your sector or to the type of services you provide. For eventualities such as workers compensation, professional liability or disability coverage; separate policies would usually need to be taken out.

Not all companies are eligible to buy business owner insurance, and eligibility will vary from one business insurance provider to another. The size, location, business class, and annual revenue are the key determining factors. If you need to buy BOP cover but cannot find a policy online, talking with an industry-specific insurance broker could help you get the coverage you need.

Disclaimer: This information has been written for the public as informational only. Since coverage varies from state to state, it is important to speak to a licensed insurance agent in your state.