BUSINESS

Business Owners Policy (BOP)

A BOP is a packaged commercial policy built for small and medium businesses — typically under a set revenue and square-footage threshold, and in a low-to-moderate risk class. It bundles the coverages most businesses need into one policy, one premium, and one renewal date, which is why it usually costs less than buying the pieces separately.

Core coverages bundled in a BOP

• Commercial property — the building you own or the improvements you've made to leased space, plus contents: inventory, furniture, equipment, fixtures, and computers. Usually written at replacement cost.

• Business income and extra expense — replaces lost profit and ongoing fixed costs after a covered loss shuts you down, and pays the extra cost of operating from a temporary location during repairs.

• General liability — third-party bodily injury and property damage claims: a customer slips and falls, your work damages someone else's property, or an employee causes damage off-premises.

• Products and completed operations — liability arising from something you sold or a job you finished, after it leaves your control.

• Personal and advertising injury — libel, slander, copyright or trademark infringement, and wrongful eviction in your advertising.

• Medical payments — small no-fault payments to someone injured on your premises, without a liability claim.

• Hired and non-owned auto — coverage when an employee drives a rental or their own car on your business.

Common add-ons: equipment breakdown, spoilage, sign coverage, employee dishonesty, and higher liability limits. Standard exclusions include professional liability, workers' comp, commercial auto, and flood and earthquake — those come separately.

Coverages

A BOP covers the property-and-premises (half of the picture). These are the gaps it commonly leaves:

• Workers' compensation — required in nearly every state once you have employees, and the only coverage that pays for employee injuries regardless of fault. Not in a BOP.

• Commercial auto — for vehicles the business owns or leases. Hired/non-owned in the BOP is not a substitute for your own fleet.

• Professional liability / E&O — errors, omissions and negligent advice. Depends on what you do: lawyers, accountants, consultants, agents, tech.

• Cyber liability — breach response, notification costs, ransomware, and liability for data you hold. Increasingly considered core rather than optional.

• Umbrella or excess liability — a limit layer above your general liability and auto, usually cheap per million and the first thing to buy once you have real exposure.

• Employment practices liability (EPLI) — wrongful termination, discrimination, harassment and retaliation claims. Frequently excluded from general liability.

• Commercial property with flood/quake endorsements — if you're in a flood zone or seismic area, the base property form won't respond.

• Inland marine — tools, equipment and goods in transit or away from your premises.

• Commercial crime — employee theft, forgery, computer fraud. Often limited or excluded in the base BOP.

• Liquor liability, builders risk, or garage keepers — triggered by specific operations.

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