What a BOP usually covers (and what it usually doesn’t)
A Business Owner’s Policy (BOP) is one of the most common—and most misunderstood—forms of business insurance. It’s designed to bundle core protections at a lower cost than buying them separately, which makes it attractive for small and mid-sized businesses.
But a BOP is not “everything insurance.” It covers a specific set of property and liability risks, with clear boundaries. This guide walks through what a BOP usually includes, what it usually excludes, and which add-ons matter most in practice.
What a Business Owner’s Policy actually is
A BOP is a packaged policy that combines general liability and commercial property into one contract.
- Bundled structure: general liability + property, priced together.
- Eligibility-based: available to certain industries, sizes, and risk profiles.
- Standardized forms: built for common risks, not unusual or highly specialized operations.
A BOP is designed for efficiency and affordability—not for every possible risk a business can face.
What a BOP usually covers
While details vary by carrier, most BOPs share a common core of protections.
General Liability
- Bodily injury: injuries to third parties (customers, vendors, visitors).
- Property damage: damage your business causes to others’ property.
- Personal & advertising injury: libel, slander, copyright-style advertising claims.
- Legal defense: attorney fees and court costs, even if claims are groundless.
Commercial Property
- Building: owned buildings or tenant improvements, if applicable.
- Business personal property: furniture, equipment, inventory, tools.
- Covered causes of loss: typically fire, theft, vandalism, wind, and similar perils.
At its core, a BOP protects your place of business and your balance sheet from common accidents.
Business income and extra expense
Most BOPs include some form of business interruption coverage.
- Business income: replaces lost income after a covered property loss.
- Extra expense: pays for temporary measures to keep operating.
- Restoration period: coverage applies while repairs are being completed.
Business income coverage only applies if the shutdown is caused by a covered property loss. No property claim usually means no income claim.
Interruption coverage keeps a setback from becoming a shutdown.
Endorsements businesses often add to a BOP
Many important protections are optional and must be endorsed onto the base policy.
- Equipment breakdown: mechanical or electrical failure of covered equipment.
- Cyber liability: data breaches, ransomware, and digital recovery costs.
- Employee dishonesty: theft of money or property by employees.
- Hired & non-owned auto: liability when employees use personal or rented vehicles.
- Ordinance or law: increased rebuild costs due to code upgrades.
- Umbrella / excess: higher liability limits above the BOP.
The strength of a BOP often comes from the endorsements—not the base form.
What a BOP usually does not cover
Understanding exclusions is just as important as knowing what’s included.
- Professional liability: errors, advice, or failure to perform services (E&O).
- Workers’ compensation: employee injuries (separate policy required).
- Commercial auto: owned vehicles must be insured on an auto policy.
- Flood & earthquake: typically excluded or very limited.
- Intentional acts: expected or intended injury or damage.
- Certain high-hazard operations: often ineligible for a BOP entirely.
A BOP covers common risks well—but leaves specialized risks to specialized policies.
Common BOP gaps that cause surprises
Problems usually arise from assumptions rather than from the policy itself.
-
Understated property values:
limits based on outdated costs can trigger coinsurance penalties.
Construction inflation makes this especially common.
- Low liability limits: base limits may not match today’s lawsuit severity.
- Unendorsed activities: side operations, deliveries, or off-site work not disclosed to the carrier.
- Cyber assumptions: believing a BOP includes cyber coverage when it does not.
Most BOP claims issues come from gaps—not denials.
Common questions
Is a BOP the same as “full coverage”?
No. A BOP covers core property and liability risks, but many exposures require separate policies or endorsements.
Can every business get a BOP?
No. Eligibility depends on industry, revenue, payroll, square footage, and risk profile.
Is a BOP cheaper than separate policies?
Often, yes—when the business fits the carrier’s target profile. Outside that profile, standalone policies may be better.
A BOP is a foundation, not a finish line
A Business Owner’s Policy is an efficient way to cover property and general liability for eligible businesses. It works best when limits are accurate, endorsements are intentional, and exclusions are understood. Build on the BOP thoughtfully, and it becomes a strong base—not a blind spot.