What a business owners policy covers
A business owners policy (BOP) packages three coverages that most small companies need into a single contract: commercial property for the building you own and the equipment, furniture and inventory you use; general liability for claims that your business caused bodily injury or property damage to others; and business income (business interruption) insurance that replaces lost net income and continuing expenses while the premises are being repaired after a covered loss. The U.S. Small Business Administration describes a BOP as a bundle that can make buying insurance simpler and often less expensive than purchasing each coverage on its own.
According to the National Association of Insurance Commissioners (NAIC), the BOP is the policy most commonly purchased by small businesses.
Who qualifies
BOPs are written for businesses with relatively predictable risks: offices, retail shops, restaurants, small wholesalers, service firms and landlords of small buildings. The NAIC notes that businesses with 100 or fewer employees and revenue of up to $5 million are generally eligible, but each insurer sets its own rules on size, square footage, building value and type of operations. Manufacturers with heavy machinery, contractors with large payrolls, bars with significant liquor sales or companies with large property schedules are often pushed toward separate, customized commercial policies.
What a BOP does not cover
- Employee injuries require workers compensation, which is mandatory for most employers.
- Vehicles owned by the business require commercial auto insurance.
- Professional mistakes such as bad advice or design errors fall under professional liability.
- Flood and earthquake are typically excluded. The NFIP commercial flood program offers up to $500,000 on a building and $500,000 on contents (FEMA).
- Viruses and pandemics: the NAIC notes that ISO introduced a virus or bacteria exclusion in 2006, and business income cover generally requires physical damage.
Useful endorsements
Most insurers let you add options to the base form, for example equipment breakdown, spoilage of refrigerated stock, employee dishonesty, data breach response, hired and non-owned auto liability, valuable papers, and contingent business income for losses at a key supplier or customer. Extended business income protects you for a period after reopening while revenue recovers.
What drives the price
| Factor | Why it matters |
|---|---|
| Industry class | A restaurant has more fire and slip-and-fall exposure than an accounting office. |
| Location | Wind, hail, wildfire and crime exposure vary by ZIP code. |
| Building and contents values | Higher insured values mean higher property premiums. |
| Limits and deductibles | Higher liability limits cost more; higher deductibles cost less. |
| Claims history | Frequent past losses usually raise the rate. |
You can get a first estimate with our BOP calculator.
How to choose and how claims work
Compare the property valuation (replacement cost versus actual cash value), the business income limit and how many months it pays, the liability limits per occurrence and in aggregate, and the endorsements included at no extra charge. If a landlord or client requires you to name them as an additional insured, confirm that the policy allows it. After a loss, protect the property from further damage, document it with photos and receipts, notify the insurer promptly and keep records of extra expenses and lost sales.
State and international notes
Insurance is regulated by each state, so forms, available endorsements and prices differ. A BOP generally protects operations in the United States; a company with offices, stock or staff abroad usually needs locally admitted policies in those countries or a multinational program coordinated with the U.S. policy. Polis Re helps you compare insurers and request quotes; policies are issued by licensed insurers and placed through licensed producers in your state.
