What does a BOP (Business Owners Policy) cover?
A Business Owners Policy, commonly called a BOP, bundles commercial property insurance and general liability insurance into one policy, typically at a lower combined premium than buying each separately. Insurers designed the BOP for small to mid-size businesses with straightforward risk profiles: retail shops, offices, restaurants, service businesses, and similar operations.
What three coverages are inside a standard BOP?
- Commercial property: protects the physical assets of the business, including the building (if owned), equipment, inventory, furniture, and fixtures. Covered perils typically include fire, theft, vandalism, and certain storm damage. The policy pays to repair or replace covered property up to the stated limit.
- General liability: covers third-party claims for bodily injury or property damage your business causes. A customer who slips on a wet floor in your store, a contractor who damages a client’s property during a job, a product that injures a buyer: these are the kinds of claims general liability addresses. It also covers legal defense costs, which can be substantial even when the claim is unfounded.
- Business income coverage: replaces revenue lost when a covered event forces the business to close temporarily. If a grease fire in the kitchen shuts a restaurant for six weeks, business income coverage pays for the income the restaurant would have earned during that closure, along with ongoing fixed expenses like rent.
How does a BOP work in practice?
For example, a Georgia coffee shop illustrates how the three parts work together. The espresso machines, refrigeration units, and bags of inventory fall under commercial property. A customer’s slip-and-fall near the counter is a general liability claim. If a kitchen fire closes the shop for a month, business income coverage replaces the revenue lost during repairs.
A typical small-business BOP might carry $500,000 in property coverage and a $1,000,000 per-occurrence general liability limit, though those figures vary by industry, location, and business size.
What does a BOP not cover?
BOPs do not cover every risk a business faces. Workers’ compensation, commercial auto, and professional liability (errors and omissions) are separate policies bought alongside a BOP, not included in it. Businesses with large fleets, specialized equipment, or significant professional-service exposure typically need those add-ons. Larger or higher-risk operations may require a fully customized commercial package rather than a BOP at all.
For example, a five-person IT consulting firm operating out of a leased office space carries a BOP for property and general liability, but adds a separate professional liability policy to cover claims arising from its advisory work. If a client alleges the firm’s recommendations caused a $75,000 data loss, only the professional liability policy responds. The BOP does not.
Who qualifies for a BOP in Georgia?
Eligibility has limits. Carriers set size and revenue thresholds; a business that exceeds them generally does not qualify for BOP pricing and needs a commercial package policy instead. Most Georgia small businesses, including retail shops, offices, and service operations with manageable revenue and square footage, fall within BOP eligibility ranges.
How do I know if a BOP is the right fit for my business?
Whether a BOP fits your business, and at what limits, depends on your revenue, square footage, number of employees, industry, and the particular risks your operation carries. A free coverage review gives you a clear picture of where a BOP fits and where you may need additional commercial coverage.