What is a Business Owners Insurance Policy (BOP)?

Opening your own business is an exciting time. Though with all the decisions you need to make to help transform what you've worked so hard for into reality, things like choosing the right insurance policy can be daunting.

One decision you will face is which insurance option is best for your business; a Business Owners Policy (BOP) or a Commercial Package Policy (CPP)?

A BOP is a "package" of essential insurance coverages designed for small to medium-sized companies. Whether you own a nail salon, an accounting office or a coffee shop, for example, a BOP policy combines protection for all major property and liability risks into one policy. A typical BOP policy includes:

  • Property- pays to repair or replace your buildings, furniture, supplies, equipment or computers destroyed or damaged in a fire or other covered loss.
  • General Business Liability Protection- pays when your company or workers are responsible for property damage or injuries due to trips and falls, product-related injuries, or other mishaps. This coverage also typically provides for medical payments regardless of fault. And this extends to injuries due to your business operations occurring away from your premises - wherever you conduct business in the U.S.
  • Business Interruption- replaces lost income when your business is disrupted due to direct damage. It also pays extra expenses for operating out of a temporary location, and to secure your property.
  • Optional Coverages and Benefits- For most businesses, there are up to 25 additional coverages you may choose to either protect your customers or others from common business risks, as well as coverages that respond to additional property risks.

A simple General Liability policy provides only general Business Liability Coverage. Businesses shopping for insurance in their early stages often buy GL-only policies because they have little property, are more concerned with liability risks, or may be asked to, "buy a GL" by lessors for the space they rent.

BOPs are much more comprehensive, and may only cost a little more. In addition to general Business Liability Coverage, they protect business property, and business interruption - with coverages customized to specific business. BOPs are far more flexible for your growing needs and a better value overall.

It is important to know BOPs do not cover all risks related to running a business. Every business has unique risks depending on products they sell, services they provide, or operations they perform. BOPs, like GL only policies, do not cover professional liability/ professional services (though that option is available for a few business types), auto insurance, workers' compensation, or health and disability insurance. You will need separate policies to cover those matters.

What types of businesses could benefit from a BOP? A BOP generally makes sense if your business:

  • Is home-based with no foot traffic, or located outside of your home.
  • Is in a building you own that is under 35,000 square feet, or less than $6M in replacement value.
  • Has less than 50 employees and less than $6M in annual sales.

How to purchase a BOP policy from Stillwater:

  • Online: It's quick and easy. We ask a few questions and you'll have a quote in two minutes. You can purchase the policy instantly.
  • Call us at (855) 712-4114. Our licensed reps are available Monday through Friday from 8am-9pm EST, and 8am-3pm EST on Saturday.
  • Visit a local independent agent. Click here to find an agent near you.