Business Owner’s Policy Insurance (BOP): What it is and Why Every Small Business Should Get One

You’ve poured your heart and soul into your business. You’ve worked long hours and made sacrifices so that you can succeed. The last thing you need is for an unexpected event to turn into an uninsured or underinsured disaster, setting you back months or years as you lose profits while you rebuild.

As a business owner, you probably already have insurance policies such as General Liability Insurance Coverage and Professional Liability Insurance, as well as other policies that cover the risks unique to your business.

But did you know there is a type of insurance policy that can protect you and your business that combines many key coverages into one convenient policy?

Enter the BOP, known in the insurance world as Business Owner’s Policy insurance.

What Is Business Owner’s Policy (BOP) Insurance?

Business is inherently risky because it opens you up to liability. Business owner policy insurance can help protect your livelihood from risk and mitigate liability by ensuring you have the protection you need and deserve.

The International Risk Management Institute, Inc. defines a Business Owners Policy as a package insurance policy that provides property and liability coverage for small businesses.

The key is combining different coverage types into a single policy that better protects your interests.

But why get a BOP? And is it really necessary?

5 Benefits of a BOP Insurance Policy

Business owner insurance policies are a great fit for qualifying small-to-medium businesses, as well as entrepreneurs, because of their customer-friendly features.

Benefits of Business Owners Policy Insurance:

  • One Convenient Policy – Combine your insurance policies into a single policy that better protects you and your business and reduces your administrative workload.
  • Protection – Insulate your business (and yourself) from business risks such as being underinsured or gaps in insurance coverage.
  • Customization – BOP insurance policies are tailor-made to fit your unique set of circumstances and risks.
  • Broad Coverage – Sure, you’ll save money, but you’ll also get broad coverage for things like fire and water damage, burglary, lawsuits, and more.
  • Save Money – Combined coverage like that found in BOP insurance reduces costs and premiums because you’re not paying for multiple separate policies.

Who Needs a Business Owner’s Policy?

Imagine you own a restaurant, and a customer gets food poisoning, claiming it to be from the food you served. Or, one of your servers trips and spills hot coffee on a customer’s lap.

In these examples, BOP insurance can protect you from the costs of customer injuries, inventory losses from perishable food, broken or damaged kitchen appliances and equipment, and even building damage if you own the property.

Risks associated with serving alcohol, business closures, and even advertising injuries could be covered by your BOP.

So, do you rent or own your business location?

You may benefit from BOP policy coverage if you meet the following criteria:

  • You operate out of a physical business location.
  • You could get sued.
  • Your inventory or equipment could get stolen.
  • Your inventory or equipment could get damaged.
  • You store private customer data.

Some industries and business types that ought to consider BOP insurance include:

  • Restaurants/Hospitality
  • Hotels and Bed & Breakfasts
  • Offices
  • Condo Associations
  • Rental Properties
  • Apartment Houses
  • Retail Stores
  • Small Contractors

Cost of Business Owner’s Policy (BOP) Insurance

Okay, so we’ve defined a BOP, who needs one, and the benefits of getting this type of insurance.

But how much does it cost?

You might be surprised to find that the annual median cost of a business owners insurance policy is only $636.

However, there are A LOT of factors that impact this cost, so your number could be higher or lower, depending on your type of business and your resulting customization needs.

Customization is one of those factors because your unique set of risks has to be considered when you’re looking at purchasing BOP insurance. Common customization factors are:

  • Industry – Is your business high-risk or low-risk? The answer will influence your insurance costs.
  • Type/Value of Property – Is your property located in an in-demand, trendy urban neighborhood or a remote rural location? The geographic location of your property and its value—and the cost it would be to replace it—will influence your insurance costs.
  • How Old is Your Business? – The maturity of your business generally affects your premiums because older businesses are often more stable. Newer businesses have a higher rate of failure and, thus, more risk.
  • Claim History – Have you ever submitted claims? If so, how often, when, and for how much? Insurance companies analyze this information when calculating your premiums to account for your risk factors accurately.
  • Coverage Limits – The amount of coverage you need impacts the price of your premiums.
  • Number of Employees – Risk exposure increases with your number of employees.

So, now that you’ve learned about BOP insurance, are you ready to speak with one of our professional agents so we can tailor a policy for your specific needs? Do you have questions about insurance coverage?

Find an agent — we’ll be happy to help you out.

Sources Why You Need a BOP: The Benefits of a Business Owners Policy.

International Risk Management Institute, Inc. Businessowners Policy (BOP) Definition.

Nerd Wallet. Business Owner’s Policy (BOP): What It Covers, How to Get It

*Disclaimer: We offer content for informational purposes; Co-operative Insurance Companies may not provide all the products listed here. Please contact your local agent to find out more about how we can help with your insurance needs.

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