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Business Owners Policy
Bring property and liability protection together in a practical insurance package for your small business.
- In short
- A BOP is a convenient bundle of liability and property for eligible businesses; it is not everything a business may need.
- Who or what is protected
- Your premises, contents and income, plus your liability to others.
- Where it stops
- Workers compensation, auto, flood, and earthquake sit outside the package.
What a BOP brings together
This guide helps you understand what a BOP packages, what it leaves out, and when a commercial package may fit better.
Policy background and wording
A Business Owners Policy, or BOP, packages two foundational coverages — general liability and commercial property — into a single policy. Many BOPs also include business income (business interruption) coverage to help replace lost income after a covered event.
BOPs are typically designed for eligible small and mid-sized businesses. Bundling can simplify administration, but eligibility, included coverages, and value depend on the carrier and policy.
BOP or commercial package?
A BOP bundles core protection for eligible businesses. A CPP assembles selected coverage parts for a more tailored program. Neither automatically includes workers compensation or auto.
Who typically looks at it
- Retail shops and boutiques
- Professional offices and small agencies
- Restaurants and cafes that meet eligibility guidelines
- Personal-service businesses with a storefront
- Small property owners and landlords
How it works
What sits inside a typical BOP, and what does not
Two core parts and a frequent third are inside the package. Several common exposures are arranged separately.
Read the diagram as text
Inside:
- General liability: Third-party injury and damage
- Commercial property: Building, equipment, inventory
Often added or worth checking:
- Business income: Frequently included; check
- Endorsements: Tailor the package
Arranged separately:
- Workers compensation
- Commercial auto
- Flood and earthquake
- Professional errors
Terms on this page
- Eligibility
- BOPs have guidelines based on size, industry and risk. Larger or higher-hazard operations may not qualify.
- Business income
- Helps replace lost income and certain extra expenses after a covered interruption.
- Covered perils
- The causes of loss the property portion responds to, such as fire or theft.
Look deeper
Is a package automatically cheaper?
Not automatically. Packaging can simplify administration.
What to check: Compare covered causes of loss, limits, deductibles, and endorsements alongside premium.
What happens if my business grows?
Larger or higher-hazard operations can exceed BOP eligibility and may need a commercial package policy.
What to check: Ask how a change in size or operations would affect eligibility.
BOP or commercial package policy?
Both bundle coverage. They differ in how the bundle is assembled.
| Business Owners Policy | Commercial Package Policy | |
|---|---|---|
| How it is built | A more standardised package | Assembled from selected coverage parts |
| Who it suits | Eligible small and mid-sized businesses | Varied, larger or more complex operations |
| Optional parts | Endorsements tailor it further | Crime, inland marine, equipment breakdown, and others can be added |
| Workers compensation and auto | Not included | Not included; coordinated separately |
Scroll sideways to compare all columns.
What it may cover, and where it stops
Exact terms depend on the carrier, policy form, endorsements, and applicable law. Review the wording with your agent.
May cover
- Third-party bodily injury and property damage (the general liability portion)
- Your building, equipment, inventory, and fixtures against covered perils (the property portion)
- Lost business income and certain extra expenses after a covered interruption
- Products-completed operations liability
- Legal defense costs for covered liability claims, subject to policy terms
Commonly excluded or limited
- Employee injuries, which workers compensation generally addresses
- Professional errors or negligent advice
- Commercial auto exposures
- Flood and earthquake, which usually require separate coverage
- Larger or higher-hazard operations that exceed BOP eligibility
Working through an example
Hypothetical and for illustration. Whether a real loss is covered depends on the facts and the policy.
- What happens
Fire damages a storefront
A covered fire damages a retailer’s inventory and forces the shop to close for a while.
- Which part is relevant
Two parts of the package respond side by side: property for the damaged stock, business income for revenue lost while closed.
- What could change the outcome
- Business income must actually be part of the package.
- Limits and deductibles apply to each part.
- The fire must be a covered cause of loss under the policy.
Other situations
Customer injury in the shop
A customer trips over a display and is injured. The liability portion of the BOP may help respond to the resulting claim and defense costs.
Before you talk to an agent
What underwriters usually weigh
- Building value, contents, and replacement cost
- Business type and liability exposure
- Location, construction, and protective features
- Selected limits and deductibles
- Claims history and years in operation
Other questions owners ask
Is a BOP cheaper than buying coverages separately?
A package can simplify administration, but it is not automatically cheaper. Compare covered causes of loss, limits, deductibles, and endorsements as well as premium.
Can any business get a BOP?
BOPs typically have eligibility guidelines based on size, industry, and risk. Larger or higher-hazard operations may need a Commercial Package Policy instead.
Does a BOP include flood coverage?
Flood and earthquake are generally excluded from a standard BOP and usually require separate policies or endorsements.
Talk through business owners policy with an agent
We compare carriers, explain the wording, and help you choose limits that fit how your business actually runs.