What Is Business Owner’s Policy Insurance?

Business owner’s policies (BOP) are a cost-effective coverage solution for small business owners who require general liability and property insurance. 

As a small business owner, you might feel that most business insurance policies aren’t right for you—either they’re too expensive or they have unnecessary coverages. At Southpoint Insurance, we can help you find a business owner’s policy with all the essential coverages you need, minus the steep price tag. 

Explaining Insurance for Business Owners

There are various occupational risks that can pose a threat to business owners’ financial stability. As a result, many different insurance policies exist to cover multiple risk scenarios and loss events. Your business operations dictate the coverage you need. For example, if you provide professional services, errors and omissions policies cover defense costs and settlements during client lawsuits. Medical providers need malpractice insurance to cover wrongdoing allegations from patients.

Many small- and medium-sized business owners with small operations only need standard coverages to pay for property loss and injury lawsuits. You have the option of purchasing individual policies to cover different risks or combining coverages in a package policy. A business owner’s policy is a type of package policy designed to reduce premium costs and cut down on unnecessary coverages for business owners. 

Close up view of two workers sitting at a table using a tablet and notepad

Protect Your Business From Common Risks

As a small business owner, a single property loss or lawsuit could shut down your operations. Our insurance experts at Southpoint protect your business by identifying your occupational risks and finding the best BOP for your needs. 

What Does a Business Owner’s Policy Cover?

Business owners who work in an office, rent a workspace, own business property, and provide services or goods to clients need general liability, business interruption, and property insurance. General liability insurance covers you against lawsuits arising from bodily injuries, property damage, or reputational damage related to your work. Property insurance replaces or repairs your property after a loss, and business interruption coverage covers lost income after a property loss.

When purchased separately, general liability and property policies can be expensive and lack the extra coverages you need as a small company owner. Commercial package policies combine general liability, property, and other business insurance coverages, but they often contain higher limits than small businesses need. BOPs are the small business owner’s solution to excessive coverages and exorbitant premiums. They combine three essential coverages and give you the option to add on extra coverage options as needed. 

Commercial Property Insurance

BOPs always contain property coverage. Almost every business owner rents or owns a commercial space that they operate out of, and most businesses own at least some personal property. Property insurance covers the costs of repairing or replacing business property after a loss event, such as a theft or fire. You can customize your limits to provide sufficient coverage for your buildings, fixtures, fences, signs, office furniture, computers, documents, and inventory.

Business Interruption Insurance

After a property loss, you may have to shut your business down for a short period while repairing or replacing damaged items. Even a few hours of lost business income during a shutdown can be financially disastrous for a small business. In the aftermath of a covered property loss, business interruption coverage pays for lost profits that you need to cover necessary expenses, such as employee wages and rent.

General Liability Coverage

Business liability insurance covers three scenarios. If a customer is injured while on your premises, or you damage their property during a job, general liability coverage pays for lawsuit costs. After a customer injury, medical payments coverage pays for smaller medical bills to try and dissuade customers from suing. General liability insurance also covers lawsuits accusing your business of slander, copyright infringement, or false prosecution. 

Optional Coverages in Business Owner’s Policies

Business owner’s policies have fewer customization options than traditional package policies. You can’t opt out of property, general liability, or business interruption coverage, but you can add additional protection through policy endorsements. Some BOP endorsement options include:

  • Flood coverage: If your business is at risk of property damage from floods, you can sometimes add coverage for flood-related property losses, depending on your location.
  • Earthquake coverage: Property damage caused by earthquakes is typically excluded from BOPs, but you can add coverage via endorsement. 
  • Data breach coverage: When cyber criminals access personal information on your network, the aftermath can be costly. Data breach coverage pays for recovery expenses. 
  • Hired and non-owned auto coverage: If you or your employees rent a car or use a personal vehicle for business, hired and non-owned coverage pays for auto losses. 
  • Liquor liability coverage: BOPs generally exclude liquor-related losses, but you can add coverage if your business serves alcohol to patrons. 
  • Crime coverage: If you want coverage for employee theft, fraudulent funds transfer, forged checks, and counterfeit currency, you can add crime coverage to your BOP.

Some business owners need to purchase additional workers’ compensation and commercial auto insurance to cover risks excluded from BOPs. Our team at Southpoint can help you determine your coverage gaps and find cost-effective coverage solutions to fit your small business insurance needs. 

Is a Business Owner’s Policy Right for You?

Many businesses can benefit from BOP insurance, but there are a few instances in which your business might not be the right candidate. Some insurance companies exclude businesses over a certain threshold of employees or profits, and others exclude businesses in specified industries. At Southpoint Insurance, we can help you determine if a BOP is right for you.

Our partnerships with top insurance carriers allow us to find comprehensive policies at affordable prices for clients of all shapes, sizes, and industries. Contact us today to take advantage of our long-term partnerships and our decades of insurance expertise. 

Supplement Your BOP

If you have coverage risks that a BOP won’t cover, we can supplement your coverage with workers’ compensation, auto, umbrella, and professional liability policies. 

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