BOP Basics - What's In a Bop?

A business owners policy (BOP) combines commercial general liability coverage with commercial property insurance for qualifying small and medium-sized companies. A BOP offers businesses the opportunity to get more affordable coverage to meet basic insurance needs. Carriers determine whether a business is eligible to purchase a BOP. A prepackaged BOP may not meet all of a company’s insurance needs, but this policy can be more cost-effective than purchasing each included policy separately. Endorsements and riders can provide additional coverage.

What Is Included With a BOP?

A BOP provides coverage for common risks, such as fire, liability claims, theft and business interruption losses. There are three core insurance coverages typically included with a BOP:

Liability Insurance

This policy helps pay for third-party claims due to injury or property damage. If someone is injured while visiting a business, this policy helps pay their medical bills. The policy may help pay for the company’s legal defense if someone alleges property damage or injury. It also helps cover the cost of repairing or replacing someone else’s property if a company owner or employee causes damage in the course of day-to-day business.

Property Insurance

Any business that owns equipment, maintains inventory or manufactures products should have property insurance. This policy helps pay for repairing or replacing company property if it’s damaged or destroyed in a covered event, such as a fire, storm, or an act of vandalism or theft. If the business leases property, the landlord may require a minimum amount of commercial property insurance.

Business Interruption Insurance

This policy, sometimes called business income insurance, helps replace lost revenue if a business must close to rebuild or repair after a covered event. If there’s a period of time when a company can’t generate revenue, this coverage can help pay for recurring expenses such as payroll, property rent and taxes.

What Type of Business Should Get a BOP?

Many business types qualify for a BOP. In general, BOPs are designed for companies located outside of a private residence with fewer than 100 employees that produce less than $5 million in annual revenue. However, eligibility criteria or BOPs vary by insurance company. When evaluating options for BOP coverage, business owners must consider risks specific to their industry. A BOP can help qualifying businesses save money, but this type of packaged insurance product doesn’t make sense for every small and medium-sized business.

What are the Benefits of a BOP?

As a business owner, there is no shortage of things that you need to manage on a daily basis. Whether it’s supervising employees, connecting with new clients or anything in between, there is only so much time in the day. That being said, it’s nice to have the peace of mind that you and your business are covered in the event that an insurance claim is brought against you. A business owners policy (BOP) is a good option for small and midsized businesses, and it can offer you plenty of advantages, including:

  • Broad coverage. BOPs cast a wide net of protection by bundling a number of different types of coverage into one plan. In general, BOPs provide commercial property, general liability and business interruption coverage in one policy.
  • Cost savings. Every dollar counts for small and midsized businesses, and BOPs can provide cost savings by combining the aforementioned policies so that you don’t have to go out and purchase each one separately.
  • Coverage for medical expenses. CGL policies will provide protection for your company if a nonemployee is injured on your premises or in an incident related to your operations. Coverage for medical payments can be triggered without legal action and allows for smaller medical claims to be settled quickly and without litigation.
  • Customization. While BOPs cover multiple types of risk for your business, you don’t need to worry about buying something that you don’t need. These policies can be tailored to fit your business’s needs with additional coverage for risks such as cyber liability, equipment breakdown, personal and advertising injury, and more.

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The information included in this website was collected from sources that are considered reliable including, without limitation, rate information provided by carriers, coverage descriptions from carriers and marketing materials from various sources. This information is provided for educational purposes only. We have not verified nor can we guarantee the accuracy, timeliness or completeness of such information. This website is provided on an "AS-IS" basis. Thus, it is solely your responsibility to verify any information you obtain from this Website before making decisions or incurring costs based on such information. This information is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice or policy coverage. Readers should contact legal counsel or an insurance professional for appropriate advice. Please refer to your policy or talk with your broker for specific coverages and exclusions that are applicable to your situation.