Business Owners Policy (BOP)
A Business Owners Policy — commonly referred to as a BOP — is a packaged commercial insurance product that combines commercial property insurance and commercial general liability insurance into a single policy, typically at a lower combined premium than purchasing the two coverages separately. BOPs are designed for small and mid-size businesses that meet certain eligibility criteria and are one of the most common ways that smaller commercial operations structure their core insurance program.
What a BOP Typically Includes
A standard BOP combines two core coverages and often includes several additional protections:
- Commercial property insurance — covers the business's building (if owned), business personal property, and improvements and betterments for tenants, against fire, theft, vandalism, and other covered perils
- Commercial general liability — covers third-party bodily injury and property damage claims arising from your business operations, products, and premises
- Business income and extra expense — most BOPs include some level of business interruption coverage that pays for lost income and continuing expenses when a covered property loss forces a suspension of operations
- Additional coverages — many BOP forms include some level of coverage for equipment breakdown, accounts receivable, valuable papers, electronic data, and other exposures, often as sublimited coverages that can be increased by endorsement
What a BOP Does Not Cover
A BOP is not a comprehensive commercial insurance program on its own. Common exclusions and gaps include workers' compensation, professional liability, commercial auto, employment practices liability, cyber liability, and umbrella or excess liability — all of which typically require separate policies. Businesses that rely solely on a BOP without evaluating these additional exposures often discover significant gaps in their program when a claim arises.
BOP Eligibility
Not all businesses qualify for a BOP. Insurers apply eligibility criteria based on revenue, number of employees, type of business, building size, and other factors. Higher-risk operations, businesses with complex exposures, or companies that exceed the size thresholds for BOP programs typically need to be placed under a Commercial Package Policy or individually rated commercial lines instead.
Industry Considerations
A BOP can be an efficient and cost-effective foundation for a commercial insurance program for many small businesses — retail shops, small offices, restaurants, service businesses, and similar operations. However, the right structure depends entirely on the nature of the business, its size, and the specific exposures it carries. Etowah Insurance Group reviews each client's operations individually to determine whether a BOP is the right fit or whether a more customized program better serves their needs. A consultation is the best place to start that conversation.
