How to Choose the Right Business Owner Policy

BOPs are one of the most common types of insurance policies for small-business owners.

Small-business owners should review their insurance needs at least annually and take time to evaluate existing coverage options. A business owner policy, or BOP, provides important protection for both business property and liability risk with a single affordable premium, resulting in less headache and hassle than with individual policies.


Small-business owners whose companies have fewer than 100 employees, revenues under $1 million annually and no excessive risk may qualify to purchase a BOP. In fact, BOPs are one of the most common types of insurance policies for small-business owners seeking to balance affordability with essential coverage.


Instead of purchasing workers’ compensation, property insurance and liability coverage for small- and medium-sized companies individually, many small and medium-sized entities find that a BOP addresses all their insurance needs with one call.

Select the amount of liability coverage based upon the assets of the company and the liability amount. Your insurance agent can explain how assets are calculated and the general application process.

Premiums are typically based upon the total size of the company, location, financial history, type of building construction, security features, general hazards and risk elements.

High-risk enterprises may not qualify for a BOP, depending upon the classification of the industry.

Inclusive Coverage

BOPs are designed to meet the needs of small-business owners by covering most standard perils, including the structure, incidents of fire and theft, as well as liability, business interruption, replacement costs and other frequently encountered perils.  It is often possible to purchase additional policies or riders to supplement the standard BOP coverage.

One popular example is to upgrade to replacement cost coverage rather than depreciation value for damaged or stolen property.

As with all forms of insurance, speak to your agent about the right combination of coverage. Be sure to ask about each of the following forms of coverage included in most BOPs.

Property Protection: Similar to general property insurance coverage, this protects the actual physical structure against named perils or provides all-risk coverage for a very competitive price.

Liability: Understand the liability limits and exclusions. Although the liability portion is similar to a commercial general liability policy, there are important differences when it comes to coverage limits, so work closely with your agent to determine the right amount of coverage for your company.

Business Interruption Insurance: This is a standard form of coverage for most BOPs, and it may provide reimbursement for up to one year of lost revenue resulting from a covered claim.

Auto/Fleet Insurance, Workers’ Compensation and Other Additions: When it comes to additional coverage options, there are plenty of options perfect for nearly any size company.