Business Owners Policy (BOP)
What Is a Business Owner's Policy (BOP)?
A business owner’s policy (called a BOP for short) is a bundle of coverage that combines general liability and property coverage into one policy. You can customize your BOP with coverage add-ons, like protection for business interruption.
A BOP is like a multi-defense shield for your small business. It safeguards you if your business accidentally hurts someone else (general liability), and it acts as a protective layer on the tangible things you use for business (business personal property) and the space you work out of (commercial property).
This policy is meant to make covering your business from common risks easier, enabling you to get all the main coverage you need in one go.
What Does a BOP Cover?
A Business Owner’s Policy (BOP) typically bundles three core coverages:
- General Liability: Protection if your business accidentally injures someone or damages their property
- Commercial Property: Coverage for the building your business operates out of
- Business Personal Property (BPP): Coverage for the business-related contents within the building, like your tools, equipment, and inventory
Depending on your business needs, you can also add coverages like:
- Business Interruption: Covers lost income and ongoing expenses if you have to close your business temporarily because of a covered loss at your location
- Workers Compensation: Pays to help your employees if they get injured while working at your business
- Professional Liability: Defends your business against claims of professional mistakes or failure to deliver
- Inland Marine: Repairs or replaces business personal property that you transport for work
- Commercial Auto: Covers the vehicle you use for work if it’s involved in an accident
- Cyber Liability: Pays for the aftermath of cybersecurity-related events, like a data breach of your customers’ personal information
- Liquor Liability: Cover damages resulting from your business’ service of alcohol to customers
Business Owner’s Policy vs. General Liability: What’s the Difference?
General liability insurance is just one type of coverage that protects your business from third-party claims of injury or property damage. Think of it as a la carte coverage, whereas a BOP is the combo meal of small business insurance, combining general liability and property coverage for value and ease.
| Aspect | General Liability (GL) | Business Owner’s Policy (BOP) |
|---|---|---|
|
What it is
|
Stand-alone policy for third-party injury or property damage claims
|
Bundled policy usually including general liability and business property, plus other add-ons
|
|
Designed to |
Protect you if your business injures others or damages their property |
Protect you from third-party claims and help cover your own property after a covered loss
|
|
Who gets paid
|
Third parties (and your legal defense)
|
You (for your property) and third parties (via general liability)
|
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Typical trigger
|
Your business accidentally causes bodily injury, property damage, or advertising injury to a third party
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Covered property loss (like a fire), or accidental injury or property damage to a third party
|
|
Good fit for
|
Basic general liability coverage, or for venue or contract requirements
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Small business owners who want one policy to cover their liability and property
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Cost compared
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Lower cost because the scope of coverage is narrower
|
Higher cost compared to general liability alone, but more coverage
|
Do you need a BOP? That depends on your business! If you only want proof of liability coverage to meet a venue, client, or lease requirement, general liability insurance may suffice. But if you want comprehensive coverage for your business location and items, too, consider a BOP.
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