WHAT is a Business Owner Policy (BOP)?

A Business Owner Policy is an insurance policy that combines protection from all major property and liability risks into one bundle. It brings the basic coverage required by a business owner together in one package and is usually sold at a premium that is less than the total cost of the individual coverage.

A typical business owner policy includes:

  • building/property insurance
  • business interruption insurance
  • general liability insurance

Depending on specific needs, a business owner and the insurance company might add other relevant coverage to the original package.

Business owner’s policies do not include the following types of insurance:

  • Liquor liability insurance for businesses that sell or manufacture alcohol,
  • Auto Insurance
  • Flood Insurance
  • Health Insurance
  • Worker’s Compensation

WHO can buy a Business Owners Policy?

BOP’s are best suited for small and medium-sized businesses.  Business owner’s policies are not available to every business.Eligibility requirements vary among insurance providers, but typically include limitations to:

  • Class of business
  • Location of the majority of business operations
  • Size (area) of a business’s primary location.
  • Revenue

The BOP is available for small restaurants, retail stores, office or service-based businesses, apartments, wholesale distributors and contractors.  Further, businesses need predominantly “on-premises” operations in order to qualify. The majority of their activities must occur on their premises with limitations on the amount of business that can be performed outside the insured’s premises.

WHY get a Business Owner Policy?

For the same reason an individual would want to get home, auto, umbrella all in one place, he would want a BOP. It makes it easier and typically more affordable. BOP is a simplified way of providing you with the basic coverage at a lower cost than with buying separate policies.

HOW much should a BOP cost?

Of course, cost varies with a number of factors. How much coverage is needed, the risk factors in the particular industry and overall asset value will play a big part in determining the cost of a BOP. However, as a general rule, consider between 20 and 30 percent of predicted gross sales as the baseline budget for ALL coverage, including health and life insurance. This is likely too low for high-risk industries like construction and manufacturing and too high for home-based consulting and businesses not offering health insurance.

If you have any questions about BOP’s, contact Bankers Insurance Group at 800-627-0000.


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