What Is Business Owners Insurance? Everything You Should Know

A widely favored insurance bundle for various home-based, small, and medium-sized businesses is the Business Owner Policy (BOP).

This insurance package usually integrates coverage for business property and general liability, offering a cost-effective alternative compared to acquiring each policy individually.

While it might not encompass all the coverage types essential for business operations, a BOP proves advantageous for most small businesses that either own or lease business premises or equipment.

Explore further to gain insights into this adaptable and user-friendly business insurance option, delving into its coverage details, eligibility criteria, and where to access it.

What Is Business Owners Insurance?
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What does a business owners policy cover?

The key advantage offered by a business owners policy lies in the consolidation of various insurance types into a single, convenient policy.

Typically, this involves the inclusion of general liability and business property coverages, resulting in a more cost-effective solution compared to individual purchases.

For additional coverages beyond the scope of this policy, you can usually customize your plan by adding specific options as needed through endorsements that cater to your unique business requirements.

Below, you’ll find the two main components of a business owners policy outlined for your reference.

Commercial general liability

Liability insurance is vital for businesses, covering customer injuries, property damage, and advertising harm.

It safeguards against lawsuits from non-employees for damages related to your business.

Coverage under commercial general liability includes bodily injury, property damage, personal and advertising injury, medical payments, damage to rented premises, and product operations.

Business owners policies usually combine personal and advertising injury limits, unlike standard policies which often separate these coverages.

Business property insurance

This policy part covers damage to your business-related property: inventory, equipment, and the space itself.

All your business property, except vehicles, falls under this. Like a homeowners policy, there are exclusions, like earthquakes. Check these in advance, and add necessary endorsements.

Commercial property insurance in a BOP has advantages. BOPs usually include extra expenses and business income coverage.

Also known as business interruption insurance, it’s vital after a covered loss to prevent income loss. Limits for some coverages can be higher than standard, like for electronic data loss.

What isn’t covered by a business owners policy?

A business owners policy covers basic needs, but not everything. For example, workers compensation is essential for businesses with employees, not included in a BOP.

Places serving alcohol need liquor liability coverage separately. Some coverages can be added to your BOP, while others require a separate policy.

Your BOP may exclude certain risks like earthquakes and floods. Earthquake coverage varies by state.

For flood insurance catering to commercial needs, consider Neptune Insurance through The Zebra.

Neptune provides larger coverage limits than NFIP and up to $25,000 in business interruption coverage ($500 per day for up to 50 days).

Do you need a business owners policy?

What is business owners insurance
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Many small businesses, including home-based enterprises and freelancers with valuable business equipment, can benefit significantly from Business Owners Policy insurance.

Opting for a single policy that combines both general liability and property coverage is an excellent strategy for these businesses, offering cost savings and comprehensive insurance coverage in a streamlined manner.

What types of businesses are eligible for a business owners policy?

To qualify for a Business Owners Policy (BOP), businesses typically need to satisfy criteria related to their annual income and the total number of employees.

Here are examples of businesses that commonly find value in a business owners policy:

  • Self-storage facilities*
  • Retail stores
  • Apartment buildings
  • Convenience stores/gas stations
  • Grocery stores
  • Smaller office buildings (typically not exceeding six stories)
  • Small motels (typically not exceeding three stories)
  • Wholesalers
  • Contractors

Other variations of business owners insurance

Businesses with fewer than four employees may qualify for a micro-business owners policy (micro-BOP), which is a more streamlined type of policy primarily focused on property loss.

It’s important to note that not all insurers offer these specific policies.

Read more: Are small businesses required to provide health insurance?

Business owners policy insurance eligibility

A business owners policy may not suit every business, especially larger ones that often require more extensive coverage available through alternative policy options.

Consequently, many insurers may not consider larger businesses eligible for a BOP plan.

Additionally, eligibility criteria for BOPs can differ among insurance providers. Generally, businesses meeting the following requirements are considered eligible:

  1. Annual revenue of less than $1 million
  2. Locations totaling no more than 35,000 sq ft
  3. Operating in a low-risk industry
  4. Employing fewer than 100 individuals


What’s covered in a Business Owners Policy (BOP)?

A BOP combines basic liability and property coverage into one policy, covering property damage, customer medical expenses, and defense costs in case of customer lawsuits.

How much does a BOP cost?

Prices vary, but the average BOP is quoted around $84 per month for Progressive.

What’s not included in a standard BOP?

Worker’s compensation insurance is required for businesses with employees. Additional coverage options may include personal liability, liquor liability, flood coverage, earthquake insurance, and health/disability coverage for you and your employees.

Is a BOP right for my business?

If your business generates less than $1 million annually and is small to mid-sized, a BOP could be beneficial. It provides basic coverage to keep operations running and mitigate financial loss, although additional coverage options are available for businesses needing more protection.

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