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Business Owner’s Policy

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What is a business owner’s policy?

Business Owner's Policy

Business Owners Policy

The business owner’s policy, often called a “BOP”, conveniently packages two types of coverage commonly purchased by small businesses.

A Business Owner’s Policy can also protect your small business from libel, slander, and certain legal claims related to advertising. In fact, the BOP can also cover loss of income and cover expenses like rent, payroll, and other financial obligations while your property is being repaired or replaced after a covered loss.

Does my small business need a BOP?

Just about every small business would benefit from general liability coverage. In fact, it may be required to contract with other businesses or to lease facilities. Alternatively, you may only need commercial property insurance when you rent, lease, or own commercial real estate. However, nearly every small business owns stuff, also called business personal property, making commercial property a frequently purchased coverage.

What if coverage isn’t required?

Even if you aren’t compelled by contract to purchase business insurance, coverage is still a good idea. Because of its convenience and value, a business owner’s policy is often the smart choice.

Pro tip: If your business causes you to work directly with the public, or you allow public access to your facilities, you should purchase coverage. Moreover, if your business owns real estate or business personal property, insurance should be a high priority.

Business owners’ policies are designed for smaller businesses, those with fewer than 100 employees and less than $5,000,000 in revenue. Due to this, a BOP is not for all businesses. If your small business qualifies for a BOP, it provides great value and can help save money and gain coverage for the most common claims.

Is a business owner’s policy right for your business?

Business Owner's Policy Eligibility

Most likely. Over 80% of small businesses will revenue qualify for a BOP policy, and more have fewer than 100 employees. So, a BOP is likely right for you. Here are some reasons to buy a business owner’s policy:

  • You work with the public
  • You rent or own a building
  • You have business personal property
  • A lawsuit could be financially catastrophic
  • You want the majority of your protection in a convenient package

Should I just buy a mono-line general liability policy?

Buying general liability as a stand-alone policy is always an option for the small business owner. However, if your business owns property, either real estate or capital equipment, you should consider a business owner’s policy.

While a mono-line general liability policy will afford your business valuable protection against third-party injury or property damage claims, it will not provide you any protection for business personal property.

Therefore, if your business owns property, you should be considering a business owner’s policy. With the BOP, you’ll get the important liability protection you require, but you’ll also get coverage for damage or loss of your real estate,  capital equipment, and inventory.

How do you get proof of general liability insurance?

Proof of insurance can be provided in the form of a certificate. You can request proof of insurance online through your user account and the proof can be provided the same day. You will also get a certificate when you start a business owner’s policy through IronPoint.

We are agents, not brokers, and can issue certificates on behalf of our commercial partners. This is a bit different from brokers and some other traditional insurance agencies, where delivery can take a few days. That’s an issue for business owners who need immediate proof of insurance to sign a pending contract.

With IronPoint, you can quickly provide proof for the lease or contract you’re planning to sign.

How much does a business owner’s policy cost?

Business Owner's Policy Cost

Frankly, there are many sites that share their cost for a BOP policy – IronPoint included. However, in reality, each business owner’s policy will differ in price based on your unique coverage requirements and classification. Here are some things that influence the cost of a business owner’s policy:

  • How much coverage will you require?
  • What is the value of the property you’ll insure?
  • What industry do you work in?
  • What is your business classification?
  • Where is your business located?
  • What is the annual revenue?
  • How many employees do you have?

Generally, larger businesses in higher-risk classes will pay more, while small businesses in low-risk classes will pay less.  It’s really pretty simple. The best way to be sure is to compare business insurance quotes and see which company comes in best for your unique coverage needs.

Customize your BOP Coverage

You sure can. One of the great things about business owners’ policies is that it is very flexible. Business owners can add additional coverages, or endorsements to their policy to meet specific coverage needs. Each BOP also comes with what is called the “BOP Coverages” which are coverages with sub-limits that may already address your specific needs.

Here are some of the coverages you can either add or increase with the BOP you choose:

Business interruption

This coverage, sometimes referred to as business income, provides benefits to protect a small business from loss of income and extra expenses when there is a temporary disruption in business operations.

Hired and non-owned auto

Provides coverage for leased and personal vehicles that a business owner occasionally uses for commercial purposes like client or site visits.

Cyber Liability

This protection provides coverage to help recover when the business experiences a data breach that exposes customer data like credit card numbers.

Liquor liability insurance

This coverage is designed to protect bars and restaurants if they serve alcohol to an intoxicated person who goes on to cause property damage or harm someone else.

While not directly part of the BOP, business owners who run high-risk businesses can add a commercial umbrella insurance policy to provide the business owner additional liability protection. Umbrella insurance extends your maximum general liability limits, meaning your insurance company can cover more expensive lawsuits.

More essential coverage for the small business

If you own a business vehicle or have employees, these are two very important coverages you need to consider. In fact, you may be required to carry these coverages in most states:

Workers Compensation

Workers’ compensation

Covers medical expenses and lost wages for work-related injuries and illnesses. It’s typically required as soon as you hire your first employee.

Learn more
Commercial Auto

Commercial Auto

Provides coverage for business vehicles. It’s required when your business owns the vehicle or you use it primarily for work.

Learn more

To find out which endorsements and policies your small business needs, ask an insurance agent.

Let’s Start a Business Owner’s Policy Quote

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Call 877-334-7646 to speak with a business specialist.

Got questions about BOP policies?

How much coverage does my business need?

There is no single answer to this question. The amount of coverage one business needs may differ wildly from another. However, the general liability limits are fairly uniform, and most small businesses select the customary $1,000,0000 / $2,000,000 limits. This provides most businesses with a secure limit of $1,000,000 per claim and an aggregate limit of $2,000,000 for the term of the policy.

Pro-Tip: When you consider which limit to select, with most general liability insurance and business owners’ policies, the legal defense costs are outside the policy limit. So, you only need to consider which limit to purchase for the purposes of covering your claims costs, not the legal defense.

What is business personal property?

Business personal property is coverage for property owned and used by your business. The property can be real estate or things like furnishings, tools, equipment, or inventory. This is a coverage included in a business owner’s policy.

Does advertising liability cover social media?

Your business owner policy does provide advertising liability coverage. Typically it’s provided for in the general liability portion of BOP policy. Advertising liability provides your small business protection from claims and lawsuits related to libel, slander, copyright, or brand infringement. Under most policies, this coverage extends to the things the business and your employees may post on social media.

Will my independent contractors have coverage under my BOP?

Generally, when you buy business insurance it provides coverage to you and your employees. If you need to extend coverage to an independent contractor, you may be able to add them by endorsement as an additional insured. However, it is best if you require them to carry their own insurance. An independent contractor should be able to provide you with a certificate of insurance for their general liability, commercial auto, and workers’ compensation coverage.

Pro-Tip: It isn’t recommended that you add contractors as additional insured. Under the insurance contract, an insured cannot make a claim against their own policy. When you add a contractor as an additional insured under your policy, you limit your ability to recover financially if the contractor causes you bodily injury or property damage.