BOP Insurance: What’s Included and How It Works (2025)

Key Takeaways

BOP insurance bundles general liability, commercial property and business interruption coverage into one affordable policy, saving small businesses money versus buying separate policies.

BOP policies cover liability claims, property damage and lost income. Though they exclude workers' compensation and professional liability, you can add them as endorsements.

To qualify for BOP insurance, your business must have fewer than 100 employees, under $5 million in annual revenue and low-risk operations.

What is BOP Insurance?

A business owner's policy (BOP) bundles different types of business insurance coverages into one convenient policy for small businesses. It simplifies insurance management and often costs less than purchasing individual policies separately.

Our study of 10 insurance companies found BOP insurance costs an average of $147 monthly, while general liability alone costs $104. That means small business owners pay just $43 more monthly to add property and business interruption coverage to their general liability protection, much less than buying separate policies.

Who Qualifies for a Business Owner's Policy?

Not every business can get BOP insurance. Insurers created these policies for small to mid-sized businesses with relatively low risks, so you need to meet specific requirements before you can get a BOP policy:

Requirements

Business Size

You should have fewer than 100 employees and less than $5 million in annual revenue

Low-Risk Industry

Your business should have minimal exposure to high-risk activities or operations

Physical Location

You need a business premises, whether owned or rented.

On-Premises Operations

Most of your business activities happen at your location rather than off-site.

Remember that eligibility requirements can vary between insurance companies. If your business falls into a gray area (maybe you have 95 employees or operate in multiple locations) get business insurance quotes from multiple providers since one might approve you while another won't.

What Does BOP Insurance Cover?

A standard business owner's policy includes three core types of protection most small businesses need:

General liability insurance

Say someone slips on your wet floor and breaks an arm, or you accidentally spill coffee on a client's laptop during a meeting. If they decide to sue, general liability covers their medical bills and legal costs.

Commercial property insurance

If thieves break into your shop or a storm damages your equipment, commercial property insurance helps you replace what's lost so you can return to business.

Business interruption insurance

Suppose a kitchen fire shuts down your restaurant for weeks. Business interruption coverage helps cover your fixed expenses like rent, payroll and loan payments while you're rebuilding.

While these three coverage types handle most situations, BOP insurance providers let you add extra protection through endorsements. You might need cyber insurance if you store customer data or protection against employee theft. Businesses with employees often add workers' compensation, while service providers frequently include professional liability insurance.

You can add these to your business owner's policy instead of buying separate small business insurance policies for every possible risk.

How Does BOP Insurance Protect Small Businesses?

Running a business means dealing with problems you never saw coming. Situations like a restaurant fire, a customer lawsuit or a break-in can hit any industry, but they affect different businesses in different ways. That's where BOP insurance steps in:


Restaurant	A grease fire breaks out in your kitchen during dinner rush, destroying equipment and forcing you to close for three weeks while repairs are made.	Your commercial property insurance replaces the damaged equipment, while business interruption insurance keeps paying your rent and staff during the closure so you don't lose everything.
Retail Store	A customer slips on your freshly mopped floor, breaks their ank and sues for $50,000. During the legal process, a burst pipe floods your stockroom, damaging inventory.	General liability covers the customer's medical expenses and legal costs, while commercial property replaces your damaged inventory and business interruption helps if you need to close temporarily.
Coffee Shop	A power outage ruins $5,000 in inventory, but when you file an insurance claim, an angry competitor posts false reviews claiming your shop caused food poisoning.	Commercial property with food spoilage coverage reimburses your ruined inventory, while general liability's advertising injury protection covers legal costs to address the defamation claims.
Professional Services	Your employee spills coffee on a client's $3,000 laptop during a meeting. Later, that same client sues claiming your advice caused their business to lose money.	General liability covers the damaged laptop and provides legal defense for the professional negligence claim, while commercial property protects your office equipment and business interruption covers lost income if legal issues disrupt operations.
Retail Boutique	Thieves break into your store, stealing merchandise and damaging your security system. A customer visiting the next day trips over broken glass and gets injured.	Commercial property covers both the stolen inventory and damaged security equipment, while general liability handles the customer's injury claim and any resulting lawsuit.
Small Office	A pipe bursts, flooding your workspace and destroying computers. While temporarily working from a coffee shop, you accidentally damage their expensive espresso machine.	Commercial property replaces your damaged equipment, business interruption covers temporary workspace costs and general liability protects you from the coffee shop's property damage claim

These scenarios show why BOP insurance makes sense, regardless of your industry. Multiple types of problems can hit your business at once, but BOP's bundled coverage handles them all under one policy instead of forcing you to juggle separate claims with different insurers.

How Much BOP Insurance Do You Need?

Your business owner's policy doesn't use one-size-fits-all limits. Each coverage type gets its own limits based on what you actually need to protect.

For example, your BOP insurance's general liability might need one level of protection, your commercial property should match what you'd pay to replace your equipment and inventory and business interruption depends on how long you could survive a shutdown. The sweet spot varies depending on what you own, where you're located, how many customers walk through your door and the kinds of lawsuits that are common in your industry.

BOP Insurance Policy: Bottom Line

BOP insurance simplifies financial protection for small businesses by bundling essential coverages into one affordable policy. Standard policies cover liability, property damage and lost income, and you can customize with endorsements like workers' compensation. If your small business qualifies, it could be a cost-effective solution.

BOP Insurance: FAQ

Small business owners have frequently asked questions about BOP insurance. We answered these below:

How do I file a BOP insurance claim?

Contact your insurer immediately after an incident. Document damage with photos and save receipts. An adjuster, provided by your insurer, assesses coverage. Get repair estimates for property damage. Business interruption claims need income and expense documentation. Commercial insurance claims typically process within 30 days.

How much does BOP insurance cost per month?

Based on our study of 10 companies, BOP insurance costs an average of $147 monthly. Your actual premium depends on your business size, industry risk, location and coverage limits.

What's the difference between BOP and general liability insurance?

General liability only covers third-party injury and property damage claims. BOP bundles general liability with commercial property and business interruption coverage for comprehensive financial business protection.

Which businesses qualify for BOP insurance?

Your business qualifies with fewer than 100 employees, under $5 million annual revenue and low-risk operations. You need a business premises where most operations occur. Eligible businesses include retail stores, restaurants, offices, salons and professional services. High-risk industries like cleaning or construction typically don't qualify.

Can I add workers' compensation to my BOP policy?

Yes, most insurers let you add workers' compensation as an endorsement rather than buying separate policies. It simplifies managing your insurance and often reduces costs. Workers' comp covers employee medical expenses and lost wages for work-related injuries, and is required in most states.

What industries need BOP insurance most?

Restaurants, retail stores, professional services and small offices benefit most from BOP insurance. They face customer liability risks, property damage from fires or theft and potential income loss during shutdowns. Any business with a physical location and customer interactions should consider BOP.

Does BOP insurance cover cyber attacks?

Standard BOP policies don't cover cyber attacks, but you can add cyber liability coverage as an endorsement. It protects against data breaches and ransomware. It's essential if you store customer payment information or personal data, covering breach notification costs and legal fees.

About Mark Fitzpatrick

Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. With over five years of experience analyzing the insurance market, he conducts original research and creates tailored content for all types of buyers. His insights have been featured in publications like CNBC, NBC News and Mashable.

Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!

Passionate about economics and insurance, he aims to promote transparency in financial topics and empower others to make confident money decisions.

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