What is Business Owners Policy (BOP)?
A Business Owners Policy, commonly called a BOP, is a commercial insurance policy that combines several important coverages into one package for eligible businesses. Instead of purchasing separate policies for common risks, a BOP typically combines general liability insurance, commercial property insurance, and business income coverage.
General liability helps protect your business from claims involving bodily injury, property damage, and certain other liability exposures. Commercial property can protect your building, business personal property, equipment, inventory, and other covered property. Business income coverage can help replace lost income and cover certain continuing expenses when a covered loss temporarily prevents your business from operating.
BOPs can often be customized with additional coverages based on the business, such as equipment breakdown, cyber liability, employment practices liability, hired and non-owned auto, spoilage, or other industry-specific endorsements.
Not every business qualifies for a BOP, and the coverage included varies by insurance company. At MBG Insurance, we can compare BOP options from multiple carriers to determine which policy and coverage options fit your business.
What Does a Business Owners Policy Cover?
The exact coverage provided by a BOP varies by insurance company, but most policies are built around three major areas of protection: general liability, commercial property, and business income.
General liability insurance helps protect your business when it is legally responsible for certain injuries or property damage involving other people.
For example, if a customer slips and falls inside your business and alleges that your business was responsible for the injury, your general liability coverage may help pay covered legal defense costs, settlements, or judgments.
General liability can also provide coverage for certain personal and advertising injuries, subject to the terms and exclusions of the policy.
Commercial Property Insurance
Commercial property insurance protects the physical property your business owns or is responsible for insuring.
Depending on the policy, this can include your building, furniture, computers, equipment, inventory, supplies, signs, and other business personal property.
Even businesses that lease their space can have a significant property exposure. Computers, furniture, inventory, tools, equipment, and improvements you've made to a rented space can represent thousands—or hundreds of thousands—of dollars in property.
Business Income Insurance
A major property loss doesn't just damage your building or equipment. It can also prevent your business from generating revenue.
Business income coverage, sometimes called business interruption coverage, can help replace lost income and pay certain continuing expenses when your business cannot operate because of a covered loss.
Depending on the policy, coverage may help with expenses such as payroll, rent, loan payments, taxes, and other necessary operating expenses while your business recovers.
The exact coverage provided by a BOP varies by insurance company, but most policies are built around three major areas of protection: general liability, commercial property, and business income.
Who Needs a Business Owners Policy?
A BOP can be a good fit for many small and midsize businesses that have both liability and property exposures.
A business that owns or leases a location, has equipment or inventory, interacts with customers, or depends on its physical location to generate revenue may benefit from the combination of coverage provided by a BOP.
Even a business with relatively little physical property can have significant liability and business income exposures.
What Types of Businesses Qualify for a BOP?
Eligibility varies considerably between insurance companies. Each carrier establishes its own guidelines based on factors such as the type of business, annual revenue, building size, payroll, number of employees, property values, claims history, and specific operations.
Businesses that may qualify include retail stores, restaurants, professional offices, service businesses, contractors, medical and dental offices, salons, technology businesses, and many other small businesses.
Some businesses with more complex or higher-risk operations may need a Commercial Package Policy (CPP) instead of a traditional BOP.
Because MBG Insurance represents multiple commercial insurance carriers, we can determine which companies are interested in your particular type of business rather than trying to fit every business into one carrier's underwriting guidelines.
What Does a Business Owners Policy Not Cover?
A BOP provides broad protection, but it does not cover every risk a business faces.
Depending on your business, you may need separate policies or endorsements for exposures such as workers' compensation, commercial auto, professional liability or E&O, employment practices liability, cyber liability, flood, commercial umbrella, bonds, and other specialized risks.
For example, a BOP's general liability coverage generally isn't a substitute for professional liability insurance when a business provides professional advice or services. Likewise, vehicles owned by the business typically require commercial auto insurance.
This is why purchasing a BOP should involve looking at the business as a whole rather than simply purchasing the basic package.
How Much Does a Business Owners Policy Cost?
There isn't one standard price for a Business Owners Policy. Two businesses in the same city can have dramatically different premiums because their operations and exposures are different.
Insurance companies consider factors such as your industry, annual sales, payroll, location, building characteristics, property values, equipment, coverage limits, deductibles, claims history, and years in business.
The insurance carrier matters too. One company may be very competitive for a particular type of business while another carrier may price that same business much differently.
As an independent agency, MBG Insurance can compare BOP options from multiple insurance companies instead of relying on the pricing and underwriting guidelines of a single carrier.
Can I Customize a Business Owners Policy?
Yes. One of the advantages of a BOP is the ability to customize the policy for the specific needs of your business.
Depending on the carrier and type of business, additional coverage options may be available.
Equipment Breakdown
Equipment breakdown coverage can help protect against certain mechanical, electrical, or pressure-system breakdowns that may not be covered by standard commercial property insurance.
Cyber Liability
Businesses of almost every size store customer information, accept electronic payments, use email, or depend on computer systems. Cyber coverage can provide protection for certain costs associated with data breaches, cyberattacks, ransomware, and other covered cyber events.
Employment Practices Liability
Employment Practices Liability Insurance (EPLI) can provide protection against certain employment-related allegations, such as wrongful termination, discrimination, harassment, and other covered employment practices claims.
Hired and Non-Owned Auto
If employees use their own vehicles for company business or your company occasionally rents vehicles, hired and non-owned auto liability may be an important coverage to consider.
Equipment, Tools and Property Away From Your Location
Businesses that regularly take tools, equipment, or other property away from their premises may need inland marine coverage. Standard commercial property insurance may not provide the protection you need once property leaves the insured location.
The available endorsements vary by carrier, which is another reason to review the actual coverage rather than comparing BOPs based solely on premium.
Business Owners Policy Insurance in Missouri, Arkansas and Kansas
MBG Insurance helps businesses throughout Missouri, Arkansas, and Kansas compare Business Owners Policies and other commercial insurance options.
With offices in Springfield and Oak Grove, Missouri, and Bentonville, Arkansas, our team works with businesses ranging from contractors and restaurants to property owners, professional offices, retailers, and service companies.
Because we're an independent insurance agency, we aren't limited to one insurance company. We can compare multiple commercial carriers to find a policy designed around the actual exposures of your business.
Why Choose MBG Insurance for Your Business Owners Policy?
Commercial insurance isn't just about getting a certificate or finding the lowest premium. The policy needs to properly reflect what your business does, what property you own, where you operate, and what could financially impact the business after a loss.
At MBG Insurance, we take the time to understand your operations before approaching insurance companies. We can then compare options from multiple carriers and help you understand the differences in coverage, limits, deductibles, endorsements, and exclusions.
As your business changes, your insurance needs can change with it. Adding employees, purchasing equipment, buying vehicles, opening another location, increasing sales, or offering new services can all create exposures that weren't present when your original policy was written.
