If you own a small or medium-sized business, you’ve probably heard the term “Business Owner’s Policy” or BOP. It’s one of the most common types of commercial insurance, but many business owners aren’t sure exactly what it includes — or whether it’s the right fit for their needs. Here’s a clear breakdown.
What Does a BOP Include?
A Business Owner’s Policy typically combines three core coverages into a single, bundled package: commercial general liability insurance, commercial property insurance, and business interruption insurance.
Commercial general liability protects your business against claims of bodily injury or property damage caused by your operations, products, or services. If a customer slips and falls in your store or your product causes damage to someone’s home, general liability helps cover legal costs and settlements.
Commercial property insurance covers your physical assets — your building (if you own it), equipment, inventory, and furniture — against risks like fire, theft, vandalism, and certain weather events.
Business interruption insurance kicks in when a covered event forces you to close temporarily. It helps replace lost income and cover ongoing expenses like rent and payroll while your business recovers.
Who Is a BOP Designed For?
BOPs are typically designed for small to medium-sized businesses that operate in low-to-moderate risk industries. Retail stores, professional offices, restaurants, small service businesses, and independent contractors are common candidates. The specific eligibility requirements vary by insurer.
Businesses with higher risk profiles — such as manufacturers, contractors working on large projects, or businesses with significant fleet operations — may need standalone commercial policies or specialized coverage in addition to or instead of a BOP.
What a BOP Typically Does Not Cover
It’s just as important to understand what a BOP does not include. Most BOPs do not cover professional liability (errors and omissions), commercial auto insurance, workers’ compensation, or health and disability insurance for employees. These coverages typically need to be purchased separately.
The Benefit of Bundling
One of the main advantages of a BOP is cost efficiency. Bundling multiple coverages into one policy is often more affordable than purchasing each policy separately, and it simplifies your insurance management.
Is a BOP Right for Your Business?
The best way to find out is to speak with an independent insurance agent who can assess your specific risks and help you explore options. Hostetter Agency, Inc. works with multiple insurers and can help you compare coverage so you can make an informed decision. Call us at (410) 272-6110 or fill out our online form to get started.