What is a business owner’s policy (BOP), and how much does it cost?

What a BOP includes

The NAIC describes the BOP as the most commonly purchased policy by small businesses. It typically combines three coverages.

• General liability: injuries to others, damage to their property and advertising injury.
• Commercial property: your building if you own it, plus equipment, furniture and inventory.
• Business interruption: lost net income and continuing expenses, such as rent, payroll and loan payments, while you are closed for repairs after covered property damage.

What a BOP does not include

According to the NAIC, a BOP typically does not include commercial auto, workers’ compensation, health or disability insurance, or professional liability. Business interruption generally does not cover flooding or earthquakes, and losses unrelated to physical damage, such as revenue lost to a pandemic, are commonly excluded. Many BOPs let you add endorsements, such as hired and non-owned auto, data breach coverage or equipment breakdown.

How much a BOP costs

Insureon reports a median of about $83 a month among its small-business customers; 25% pay less than $50 a month and 33% pay $50 to $100. Most (79%) choose $1 million / $2 million liability limits, and the average deductible is $500. Price depends heavily on the industry and the value of property insured.

Who qualifies for a BOP

BOPs are designed for small, lower-hazard businesses: offices, shops, restaurants, many service firms and light contractors. The NAIC notes that companies with 100 or fewer employees and revenue up to about $5 million are typically eligible, though each insurer sets its own rules. Businesses with large property values, heavy manufacturing or higher-hazard operations may need a commercial package policy or separate policies instead.

Three examples

How a BOP fits depends on what you own and what you do. These simplified examples show the reasoning, not a recommendation for any specific business.

• A boutique leasing a storefront: customers visit daily and the inventory is valuable. A BOP covers slip-and-fall claims, the stock and fixtures, and lost income if a fire closes the shop. The lease will likely require the liability portion.
• A two-person marketing consultancy working from home: little property and few visitors. General liability plus professional liability may fit better than a BOP, though a BOP can still make sense if you have meaningful equipment.
• A small restaurant: high foot traffic, kitchen equipment and spoilage risk. A BOP is a common base, often with endorsements for equipment breakdown or food spoilage, plus workers’ compensation and possibly liquor liability, which a BOP does not include by default.

Endorsements worth asking about

Many insurers let you add coverage to a BOP rather than buying separate policies. Availability and terms vary, but common options include:

• Hired and non-owned auto liability, for employees using personal or rented vehicles for work.
• Equipment breakdown, for mechanical or electrical failure of covered equipment.
• Data breach or limited cyber coverage.
• Spoilage, for perishable stock.
• Higher limits for valuable papers, outdoor signs or customer property.

BOP or separate policies?

If you need both liability and property protection, a BOP is usually the simplest and most cost-effective starting point. If you have no meaningful property — for example, a consultant working from a laptop — general liability alone, possibly with professional liability, may be enough. If you need high property limits or specialized coverage, separate policies can be tailored more precisely. A broker can quote both ways and show the difference.