What Is a Business Owner’s Policy (BOP)?
Insurance companies that sell commercial insurance offer policies that bundle protection against major property and liability risks. (These coverages can also be purchased separately.)
For small and medium-sized businesses, a common option is the Business Owner’s Policy (BOP)—a package policy designed for businesses that typically face similar types and levels of risk. Larger companies may opt for a commercial package policy (CPP) or customize their own coverage to address more complex or industry-specific exposures.
A standard BOP typically includes:
- Property Insurance:
Covers the company’s buildings and contents. There are two coverage forms—standard and special, with the special form offering broader protection. Some policies now include limited coverage for digital assets or equipment breakdown, depending on the insurer. - Business Interruption Insurance:
Covers lost income resulting from a disaster—such as a fire—that disrupts business operations. It may also cover extra expenses incurred while operating from a temporary location.Some modern BOPs also offer optional coverage for cyber-related business interruption. - General Liability Insurance:
Protects the business from legal liability for bodily injury or property damage caused to others due to the actions or negligence of the business or its employees. This may include claims related to defective products, improper installations, or mistakes in services provided.
⚠️ A BOP does not cover:
- Professional liability
- Commercial auto insurance
- Workers’ compensation
- Health or disability insurance
Cyber liability, employment practices liability, and data breach coverage are also typically excluded from a standard BOP but may be added as endorsements.
These coverages must be purchased separately to fully protect your professional services, company vehicles, and employees.