Commercial Insurance Blog

What is a BOP?

A BOP is an acronym for Business Owners Policy and is a good, simple solution for many small businesses’ core property and liability insurance needs.

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A typical BOP has three primary sections:

  1. Property coverage for your business property such as furniture, stock and inventory.

  2. Liability coverage in case you are sued or your product hurts somebody.

  3. And Business Income coverage if your business is damaged such that it cannot operate for a period of time. This coverage will cover lost income including payroll and profits.

A Business Owners Policy is the insurance industry's answer to small businesses inspired by the Homeowners Policy that most people use to insure their homes.  Just as a homeowners policy is considered a “package” of disparate coverages (i.e. financial protection for the home; its contents; liability coverage including defense; and a rental to live in if the house cannot be occupied), the BOP works the same way but for businesses.  It is also a package of a variety of protections as bulleted above, and can include the building if it is owned by you.

Insurance carriers typically "throw in" a variety of additional coverages that may or may not apply to your particular business.  It is more cost effective for them to do this versus adding on and pricing a la carte.  When comparing quotes or policies, focus on those lines that apply to YOUR operations.

The BOP is a good starting point to manage risk, but it does not do everything.  For example, Employment Practices Liability is excluded.  Given the growth in claims for discrimination and wrongful termination, this coverage can either be added to a BOP or purchased separately.  Similarly, liability arising out of a data breach or other cyber attacks are normally not included in a BOP.  Ask for this line to be quoted and endorsed on to the BOP if appropriate and available.  Naturally the BOP does not include many specialty coverages as such as Pollution, Directors & Officers, Flood and other more specific needs.

A BOP should be written in concert with your Workers Compensation coverage, which protects employees when they are hurt on the job, and/or your Business Auto insurance, also always handled separately.

With a nod to what's not included, by itself and when eligible the BOP is truly a well-priced and broad solution for many businesses.

To discuss your business exposure and needs, and to see if a BOP is right for you, call the insurance professionals at Gordon Atlantic toll free at (800) 649-3252.  Wish to type instead of talk?  Click below for an answer or a quote.

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