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Business Owners Policy (BOP) for small businesses

A Business Owners Policy (BOP) bundles general liability, commercial property, and business interruption coverage into a single package for small and mid-sized businesses, usually at a lower cost than buying each policy separately.

Updated
$57
Median monthly premium for business owners policy (bop)
Source: Insureon
$1M per occurrence / $2M aggregate GL plus $50K–$500K property
Most common coverage limits
Carriers we cover for business owners policy (bop)

A business owner's policy (BOP) bundles general liability, commercial property, and business interruption coverage into a single package for small and mid-sized businesses — typically at a lower combined premium than buying the three policies separately.12 Across Insureon's small-business marketplace, small businesses pay a median of approximately $83 per month for a BOP, with the full annual premium range running $600 to over $4,000 depending on industry, revenue, property limits, and location.3 Hiscox's 2025 Underinsurance in Small Business Report identifies underinsurance on commercial property and business interruption as one of the most common small-business coverage gaps — meaning many buyers carry BOP limits well below what a realistic property loss plus the resulting business interruption would actually require.4

This page walks through who needs a BOP vs. standalone GL plus separate property, what a BOP covers, what it doesn't, how to size the three component limits, how it's priced, and which carriers in our coverage set are the stronger BOP options for specific buyer profiles.

Who needs a BOP

A BOP is the right product for small-to-mid-sized, low-to-moderate-risk businesses that need both general liability and commercial property coverage.1 The qualifying patterns:

  • Retail stores, offices, restaurants, salons, and service businesses with a physical location, inventory or equipment on-site, and third-party foot traffic. This is the classic BOP profile — GL for third-party claims, property for the business's own physical assets, BI to replace income if a covered loss forces a shutdown.
  • Tenants of commercial space whose lease requires both GL and property coverage on the tenant's business personal property. A BOP satisfies both requirements in one policy.
  • Contractors without significant commercial auto exposure. Contractors who own tools and equipment but drive personal vehicles for work can often package GL + property in a BOP and pair it with hired-and-non-owned-auto coverage.
  • Consultants and professional services firms with owned office equipment. A consulting firm that owns laptops, furniture, and client data typically wants GL + some property coverage for the equipment; a BOP is usually cheaper than standalone GL plus separate property.

The BOP-vs-Commercial-Package-Policy threshold. BOPs are designed for the lower end of commercial risk. Higher-risk businesses — large manufacturers with heavy machinery, warehouses exceeding typical BOP size limits, operations with substantial auto fleets, and businesses with complex coverage needs — typically need a Commercial Package Policy (CPP) instead, which offers the same coverage concept with broader underwriting and no BOP-specific eligibility caps. Most small businesses under ~100 employees and under ~$5-10M in revenue stay within BOP appetite; businesses beyond that threshold typically move to CPP.1

Businesses that should NOT buy a BOP:

  • Pure-digital services with no physical office, no owned equipment, and no on-site client interaction — standalone GL is usually sufficient.
  • High-hazard classes outside typical BOP eligibility guidelines (heavy manufacturing, large-warehouse operations, certain construction trades).
  • Businesses whose primary exposure is professional error rather than third-party injury or property loss — professional liability is the more important first policy.

Industry-specific coverage: For per-industry coverage guidance, see our industry pages — restaurants, e-commerce and retail, consultants, accountants, fitness and wellness, cleaners, landscapers, general contractors, and photographers.

What a BOP covers

A standard BOP packages three core coverages into one policy:15

1. Commercial property insurance. Covers the business's building (if owned) and business personal property — furniture, inventory, equipment, tools, computers, signage — against covered perils. Most BOPs use a Special Form (often called "all-risk") coverage grant, meaning any direct physical loss is covered except for specifically excluded causes. Named-perils versions exist but are less common in the BOP market.

2. General liability insurance. Third-party bodily injury, property damage, and personal and advertising injury — the same coverage grant detailed in our general liability page. Standard limits on a BOP are typically $1M per occurrence / $2M aggregate, matching what commercial leases and client contracts most commonly require.

3. Business income (business interruption) coverage. Replaces lost income and pays continuing operating expenses (rent, payroll, loan payments) if a covered property loss forces the business to shut down temporarily. The coverage period typically extends until operations are restored or a policy-defined indemnity period expires (commonly 12 months). Extra expense coverage is usually included to pay for temporary relocation and expedited repair costs.

Common BOP enhancements by endorsement:

  • Equipment breakdown (boiler and machinery) coverage for electrical, mechanical, or pressure-system failures.
  • Hired and non-owned auto for businesses whose employees use personal vehicles for work errands.
  • Employment practices liability (EPLI) as an add-on — see the EPLI page.
  • Cyber liability as an add-on for basic first-party data-breach coverage — though dedicated cyber policies are typically stronger.
  • Crime coverage (employee dishonesty, money and securities).

What a BOP doesn't cover

BOPs are intentionally scoped. Standard BOP exclusions:1

  • Flood and earthquake damage — universal BOP exclusion. Separate flood insurance (typically NFIP or a private flood carrier) and earthquake insurance are required for those exposures.
  • Professional errors and omissions — addressed by professional liability / E&O.
  • Employee injuries — addressed by workers' compensation.
  • Auto liability and physical damage on owned vehicles — addressed by commercial auto insurance. BOPs may offer hired-and-non-owned auto by endorsement but not full commercial auto.
  • Cyber incidents — some BOPs offer basic cyber by endorsement; dedicated cyber liability is stronger.
  • Employment practices claims — addressed by EPLI.
  • Intentional or criminal acts by the insured.
  • Wear and tear, insect or vermin damage, and mechanical breakdown (the last often covered by equipment breakdown endorsement).
  • Government seizure and nuclear incidents.

Policy limits and how to choose them

BOPs have more limit components than standalone GL, and sizing each component correctly is where most buyers underthink the product.

GL limits inside a BOP. Standard $1M per occurrence / $2M aggregate applies, matching the direct-GL-policy baseline. Lease and contract requirements drive the limit choice the same way they do for standalone GL; see our general liability page's policy-limits section for the full framework.

Property limits. Sized to the replacement cost of the business's physical assets:

  • Business personal property (BPP) limit — replacement cost of furniture, inventory, equipment, tools, and other movable assets. Underinsurance on BPP is one of the most common small-business coverage gaps per Hiscox's underinsurance research.4
  • Building limit (if the business owns the building) — replacement cost of the structure, typically sized with a guaranteed-replacement-cost or extended-replacement-cost endorsement to protect against inflation.
  • Improvements and betterments — improvements the tenant has made to the rented space (buildout, fixtures, custom installations). Coverage for tenant improvements is often separate from BPP.

Business interruption limits. Usually expressed as a per-month indemnity limit and an indemnity period (often 12 months). Size the monthly limit to cover:

  • Lost gross profit during the shutdown period.
  • Continuing operating expenses (rent, loan payments, essential payroll).
  • Extra expense costs (temporary relocation, expedited repair, outsourced production).

Businesses typically underestimate BI limits. A realistic BI calculation should include not just revenue replacement but operating expenses that don't pause during a shutdown and the reality that recovery often takes longer than expected. Hiscox's underinsurance research consistently finds BI sub-limits below realistic shutdown costs.4

Co-insurance clauses. Most BOPs include a co-insurance clause on the property section, typically requiring the insured to maintain coverage at 80% (sometimes 90%) of replacement cost. If actual coverage falls below the co-insurance requirement at the time of loss, the insurer pays only a proportional share of the claim. This is the mechanism through which underinsurance becomes a claim-time problem.

Cost and how to buy a BOP

For full cost analysis with industry breakdowns, top carriers by published starting price, and 2026 benchmark data, see our business owners policy (bop) cost guide.

Marketplace cost data. Insureon's aggregated data shows small businesses pay a median of $83/month for a BOP, with the full premium range spanning $600 to over $4,000 per year.3 BOP pricing factors:

  • Industry class code. Same as GL — low-risk professional services near the bottom of the range; retail, restaurants, and contracting higher.
  • Property values. Higher building and BPP limits scale premium. A coffee shop with $50K in BPP costs less than a boutique retailer with $300K in inventory.
  • Location. Geographic factors (crime rates, severe-weather exposure, fire-protection infrastructure) affect property premium.
  • Revenue and exposure. Higher revenue means higher GL exposure; premium scales accordingly.
  • Claims history. Prior property or GL claims raise renewal premiums.
  • Deductibles. Property deductibles typically start at $500-$1,000; raising the deductible to $2,500 or $5,000 meaningfully reduces premium.

Carrier pricing floors (carrier-advertised starting or aggregate premiums):

  • NEXT Insurance — BOP from $25/mo on A+ paper post-ERGO acquisition.6
  • Hiscox — BOP from $41.67/mo (~$500/yr) on A-rated US paper.7
  • The Hartford — BOP average $141/mo on A+ paper; above-market pricing reflects broader program context.8
  • Travelers Small Business — Insureon-reported BOP median ~$57/mo on A++ paper.9
  • biBerk and Simply Business — BOP available on their platforms but starting prices not publicly published; biBerk writes BOP on A++ Berkshire Hathaway paper, Simply Business places across its 8-carrier panel.

Three paths to placement: Direct-to-carrier (NEXT, Hiscox, biBerk, Hartford, Travelers all accept direct BOP applications); broker-aggregator (Simply Business places across panel); traditional agent for non-standard profiles.10

What underwriters evaluate: standard commercial discovery plus property-specific questions — square footage of occupied space, building construction type, age, protection class (fire-hydrant and fire-station proximity), inventory and equipment values, security systems, and any prior property or GL claims.

State-by-state requirements for BOP

BOPs are not mandated by state statute in any of the 50 states as a universal business requirement.5 BOPs are a voluntary bundled product — a commercial packaging convenience rather than a regulatory requirement.

However, BOPs become functionally required through the same mechanisms that drive standalone GL and commercial property purchase:

  • Commercial lease requirements — landlords typically require tenants to carry both GL and property insurance on their business personal property. Buyers frequently choose a BOP to satisfy both requirements efficiently.
  • Mortgage covenants on owned commercial real estate — commercial lenders universally require property insurance on mortgaged property. A BOP's property component satisfies the requirement.
  • Client contract requirements — GL is frequently required by client contracts; a BOP's GL component satisfies those requirements.

For state-specific regulatory context on the commercial insurance markets where BOPs are placed, see the California Department of Insurance,11 Florida Office of Insurance Regulation,12 Texas Department of Insurance,13 and New York State Department of Financial Services14 as representative state regulatory authorities. No state DOI mandates BOP specifically; the state DOIs regulate the commercial insurance markets where BOPs are sold.

Frequently asked questions

What's the difference between a BOP and standalone GL?

A BOP bundles GL, commercial property, and business interruption into one policy. Standalone GL covers only third-party liability — not the business's own property or interruption losses. Most small businesses that need both GL and property coverage find a BOP cheaper than buying the two separately.1

How much does a BOP cost?

Insureon's aggregated small-business data shows a median of $83/month, with annual premiums ranging $600 to over $4,000 depending on industry, revenue, property values, and location.3

Is a BOP legally required?

Not by state statute anywhere. Commercial leases, client contracts, and mortgage covenants frequently require both GL and property coverage, and a BOP is usually the most efficient way to satisfy both in one policy.

Does a BOP cover my employees' injuries?

No — employee injuries are covered by workers' compensation, which is legally required in 49 states and is always a separate policy. BOPs never include WC.

Does a BOP cover my business vehicle?

No — owned-vehicle liability is covered by commercial auto insurance, which is a separate policy. Some BOPs include hired-and-non-owned auto for employees using personal vehicles for work errands, but not full commercial auto.15

Does a BOP cover flood or earthquake damage?

No — both are standard BOP exclusions. Separate flood (typically NFIP) and earthquake policies are required for those exposures.

Can I buy cyber coverage as part of a BOP?

Some carriers offer cyber as a BOP endorsement — basic first-party data-breach coverage. For businesses where cyber is a material exposure, a dedicated cyber liability policy — especially from a cyber-specialist like Coalition — is typically more capable than a BOP cyber add-on.

How do I know if my BOP property limit is high enough?

Calculate replacement cost, not cash value, of all business personal property — furniture, inventory, equipment, improvements, and betterments. Underinsurance on BPP triggers co-insurance penalties at claim time; Hiscox's underinsurance research finds a meaningful share of small businesses underinsured on property.4

When should I switch from a BOP to a Commercial Package Policy?

BOPs are sized for lower-end commercial risk — typically under ~100 employees, under ~$5-10M revenue, and within carrier eligibility guidelines. Above those thresholds, businesses usually move to a Commercial Package Policy (CPP) with broader underwriting and higher limits.1

BOP buyers commonly pair the bundled policy with additional coverage:

Citations

  1. What does a business owners policy (BOP) cover? — https://www.iii.org/article/what-does-businessowners-policy-bop-cover ↩ ↩2 ↩3 ↩4 ↩5 ↩6 ↩7

  2. Types Of Policies — Commercial Insurance — https://www.iii.org/publications/commercial-insurance/what-it-does/types-of-policies ↩

  3. Business Owner's Policy (BOP) Cost — https://www.insureon.com/small-business-insurance/business-owners-policy/cost ↩ ↩2 ↩3

  4. Hiscox 2025 Underinsurance in Small Business Report — https://www.hiscox.com/underinsurance ↩ ↩2 ↩3 ↩4

  5. Business Owner's Policy (BOP) Insurance — https://www.insureon.com/small-business-insurance/business-owners-policy ↩ ↩2

  6. NEXT Business Owner's Policy — https://www.nextinsurance.com/business-owners-policy/ ↩

  7. Hiscox Business Owner's Policy — https://www.hiscox.com/small-business-insurance/business-owners-policy ↩

  8. The Hartford — How Much Is Business Insurance — https://www.thehartford.com/business-insurance/how-much-business-insurance-cost ↩

  9. Travelers — Small Business Insurance — https://www.travelers.com/small-business-insurance ↩

  10. Best BOP Companies — https://www.insureon.com/small-business-insurance/business-owners-policy/best-companies ↩

  11. California Department of Insurance — https://www.insurance.ca.gov ↩

  12. Florida Office of Insurance Regulation — https://www.floir.com ↩

  13. Texas Department of Insurance — https://www.tdi.texas.gov ↩

  14. New York State Department of Financial Services — https://www.dfs.ny.gov ↩

  15. iii.org — How Does Commercial Auto Insurance Work — https://www.iii.org/article/how-does-commercial-auto-insurance-work ↩

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Top carriers

Compare top business owners policy (bop) carriers

Recommended carriers for this coverage, ranked against our 6-dimension methodology.

Sub-threshold = fewer than 20 NAIC complaints in 3 years (data is too sparse to score reliably). N/A (broker) = not a carrier. See full methodology →

CarrierOur scorePositioningStarting priceCoverageClaimsAM BestNAIC indexStatesQuote channel
7.8Digital-native micro-businessCyber $4/mo7.0/107.5/10A+ Sub-threshold 50 statesDirect online
7.0Professional services E&O focusGL $30/mo7.5/108.0/10A8.1550 statesDirect online
7.2Berkshire-backed contractual umbrellaGL $28/mo8.0/108.0/10A++13.2550 statesDirect online
7.9Single-carrier program for SMBsGL $68/mo9.0/108.0/10A+ Sub-threshold 50 statesDirect online
8.1Broad-ladder primary carrierGL $42/mo9.0/108.0/10A++ Sub-threshold 50 statesDirect online
8.1Broker comparing 8+ carriersGL $21/mo8.5/107.5/10— N/A (broker) 50 statesBroker portal

About complaint index data: Values are 3-year averages from NAIC Consumer Information Source for commercial liability. Carriers with fewer than 20 complaints in the 3-year window are labeled "sub-threshold". A reliability call about data volume, not a finding about the carrier. Brokers (Category D) are structurally N/A. See our complete methodology.

Full per-carrier analysis lives in each carrier review. See our scoring methodology for how we weight the dimensions above.

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