What is a Business Owner’s Policy?

what is a business owners policy?


A business owner’s policy (BOP) is a term that is often used in the insurance for businesses world. If you’re a business owner, you very likely have thought about the risks that come with opening up a business. But the truth is business owners face a variety of risks – ones that are often difficult to anticipate.  A business owner’s policy  (BOP) is a type of policy that can help protect your business from these less obvious liabilities. It’s different than many other kinds of insurance policies because it offers coverage for varied types of exposures common in small and midsize businesses. For example, coverage can include property damage or loss due to fire and theft. 


What is Included in a BOP?


A BOP may include the following types of coverage:


  • Property Casualty Insurance

    . The most common types of property-casualty coverage are fire, theft, and windstorm (or hurricane) damage to a building: burglary or robbery, vandalism, malicious mischief against your property, flood damage, hail damage if it’s severe enough to cause significant damage to your business, and earthquake damage


  • Business Income Insurance.

    A type of insurance that covers the lost revenue you incur when your business is temporarily shut down by a covered loss. Business interruption coverage is included in many business owner’s policies (BOPs), but it can also be purchased separately as an add-on to your policy.

  • Liability Coverage

    . Liability coverage protects you from claims of negligence. This coverage protects you against lawsuits filed against you if someone was injured on your premises or because their belongings were damaged while they were there.

    • Commercial Auto Insurance (CAI) – Provides protection against bodily injury or property damage caused by your company’s vehicles, including delivery trucks and other work vehicles. CAI does not cover automobile accidents that occur when employees drive their own cars: those would be covered under personal auto policies.


  • Additional Coverage.

    Options include things like workers’ compensation exclusions ( only employees’ medical bills will be covered under worker’s comp laws), additional liability limits beyond those required by law (such as $1 million per occurrence/ $2 million aggregate), medical payments coverage for injuries sustained by employees while working at home offices, etc.


Business Owner’s Policy Exclusions


Bop does not cover professional liability, worker’s compensation, and other types of coverage. It’s important to note these business owner policy exclusions. BOP is not a substitute for business owners’ liability insurance. If your company has employees or independent contractors, you’ll need to purchase additional policies.


BOP also won’t cover losses due to war or terrorism, this may be covered under commercial property insurance.


Business Owner’s Policy Exclusions: Professional Liability


If you’re a business owner, the chances are good that your company will be exposed to professional liability. Professional liability is a type of coverage that is made by clients or customers. Examples of professional liability claims include malpractice and errors in judgment.


If this type of coverage is important to your business. It’s best to get it separately from the BOP because not all insurers offer this type of coverage as an add-on for their policyholders.


Business Owner’s Policy Exclusions: Workers Compensation Exclusions


Worker’s compensation exclusions are not covered by BOP insurance.


Examples of worker’s compensation exclusions:

  • Losses resulting from bodily injury or occupational disease sustained by an employee while performing duties for their employer, either on or off the premises of your business. This also includes traveling to and from work, as well as time spent at home recovering from an injury sustained on the job.


Types of Businesses That Are Most Likely To Purchase this Type of Insurance


  • Restaurants
  • Retail Stores
  • Construction Companies
  • Accountants
  • Lawyers


A Business Owner’s Policy Protects You From Unforeseen Liablityies That Could Arise From Day-to-day operations


If you run a business, it’s important to protect yourself and your assets from unforeseen liabilities that could arise from day-to-day operations. A business owner’s policy (BOP) provides coverage for property damage, liability claims, and other expenses related to running your company. Fill out our online quote form or call and Talk to a business protection advisor today to see if this type of policy is right for you and your business.

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