Business Owner's Policy (BOP)

What a business owner's policy covers

A business owner's policy (BOP) packages the coverage most small businesses need into one policy with one premium. A standard BOP includes three parts:

1. General liability. Covers claims that your business injured someone, damaged their property, or caused advertising injury. It is the same protection described on our general liability insurance page.
2. Commercial property. Covers your business property against covered events such as fire, theft, wind and vandalism. That includes equipment, furniture, inventory and supplies, plus the building if you own it.
3. Business interruption (business income). Replaces lost income and helps pay ongoing bills if a covered property loss forces you to close temporarily.

Example: A fire in the unit next door spreads smoke and water into a nail technician's studio. The salon has to close for two weeks while equipment and furniture are cleaned or replaced. The BOP's property coverage pays for the damaged items, and business interruption coverage helps replace the lost income.

What a BOP doesn't cover

• Employee injuries. You need separate workers' compensation.
• Vehicles. Business-owned cars, vans and trucks need commercial auto insurance.
• Professional mistakes. Advice and service errors need professional liability (E&O).
• Flood and earthquake damage, which usually require separate policies or endorsements.
• Tools you take from job to job, which may be better protected by tools and equipment insurance.
• Major cyber incidents, which need cyber liability insurance.

Who needs a business owner's policy?

A BOP fits small businesses that have both liability risk and property worth protecting:

• Retail shops and online stores that hold inventory
• Salons and studios, like hair stylists, barbers and estheticians
• Restaurants, cafes and bakeries
• Offices for consultants and real estate agents
• Landlords with small commercial properties

Many commercial leases require general liability and property coverage, and a BOP often meets both requirements at once.

Not every business qualifies. Insurers usually limit BOPs to businesses below a certain size and revenue, with lower-risk operations. Very high-risk trades may be offered separate policies instead.

How much does a BOP cost?

According to Insureon's 2026 data from 100,000 small-business customers, the median cost of a business owner's policy is $83 a month, or $990 a year. Costs vary by industry:

Compare that with the median for general liability alone ($45 a month) and commercial property alone ($108 a month), both from the same Insureon 2026 data. For many businesses, the bundle is the better deal. Your price depends on:

• Property value and the type of building you are in
• Location, including weather and crime risk
• Industry and the number of customers who visit
• Limits and deductibles you choose
• Claims history

See the full breakdown in how much does business insurance cost.

Limits and deductibles explained

A BOP has separate limits for each part:

• Liability limits, often $1 million per occurrence and $2 million aggregate.
• Property limit, which should match the cost to replace your equipment, inventory and improvements.
• Business income limit, sometimes based on a number of months of lost income.

The property deductible is what you pay before property coverage starts, for example $500 or $1,000 per claim. Liability claims often have no deductible.

Ask whether property is valued at replacement cost (what it costs to buy new) or actual cash value (replacement cost minus depreciation). Replacement cost costs more but pays far more after a loss.

Common BOP add-ons

Insurers often let you add endorsements, such as:

• Equipment breakdown for machinery and electronics
• Hired and non-owned auto (HNOA) for liability when employees use personal or rented cars for errands
• Data breach coverage with low limits
• Spoilage for food businesses
• Employee dishonesty for theft by staff

How to buy a BOP

Ask a licensed agent or broker, an insurer, or an online marketplace for BOP quotes. Have your property values, revenue, square footage and lease requirements ready. Then compare the BOP price with separate general liability and property quotes, and check that your lease's required limits are met. You can get a quick estimate with our business insurance cost calculator.

BOP vs. separate policies

A BOP is not always the right choice. Here is a quick way to decide:

Even with a BOP, most businesses still need other policies alongside it, such as workers' comp for employees and professional liability for advice-based work.

How to lower your BOP premium

• Set accurate property values. Overinsuring wastes money; underinsuring leaves you short after a loss.
• Raise the property deductible if you can comfortably pay it.
• Improve security and fire safety. Alarms, sprinklers, deadbolts and fire extinguishers can lower property rates.
• Pay annually if your insurer offers a discount for paying in full.
• Keep a clean claims record and review your policy each year as your business changes.
• Remove coverage you don't need, such as add-ons that duplicate other policies.

Example: A small online store keeps inventory in a rented storage unit. A burst pipe ruins several boxes of products. The BOP's property coverage pays to replace the inventory, minus the deductible, and the owner avoids paying for a separate property policy.