Business Owner’s Policy (BOP) Explained: The Bundle That Saves Money (2025)
When my friend opened her bakery she got quotes for general liability coverage insurance and commercial property insurance insurance separately. Total was going to be around $3,200/year. Then her insurance agent mentioned the BOP option. Same coverage, bundled together, $2,400/year.
That’s $800 saved for literally the same protection. Just packaged differently.
A Business Owner’s Policy is basically the small business equivalent of bundling your home and auto insurance. Insurance companies give you a discount for buying multiple coverages together. Simple concept but a lot of small business owners don’t know it exists.
What’s in a BOP
Standard BOP bundles two main things:
General liability insurance. Covers bodily injury, property damage, personal/advertising injury. Someone slips in your store. You damage a client’s property. The basics I covered in my general liability article.
Commercial property insurance. Covers your business property—building (if you own it), equipment, inventory, furniture, computers. Fire, theft, vandalism, certain natural disasters. The stuff you need to actually run your business.
Many BOPs also include business interruption insurance—covers lost income if you have to shut down temporarily due to a covered loss. Building burns down, you can’t operate for three months while it’s rebuilt, business interruption pays your ongoing expenses and lost profits.
Some BOPs throw in other stuff too. Equipment breakdown. Data breach coverage. Hired/non-owned auto liability. Varies by insurer.
Why it’s cheaper
Insurance companies like selling bundles because it’s less administrative work and you’re less likely to switch carriers. So they discount it. You get same coverage for less money than buying policies separately.
Also BOPs are somewhat standardized for small businesses, which means less custom underwriting, which means lower costs passed to you.
Not every business qualifies though. BOPs are designed for small to medium businesses with relatively low risk. If you’re too big, too risky, or too unusual, you’ll need individual policies.
Who BOPs are good for
Small retail stores. Restaurants (sometimes—depends on size). Professional offices. Small contractors. Service businesses. Basically your typical Main Street small business.
Usually there are size limits. Under $5 million in revenue. Under certain square footage. Fewer than 100 employees. Limits vary by insurer.
Some business types don’t qualify for standard BOPs. Bars, auto repair shops, anything with unusual risk profiles. You’d need separate policies or specialized packages.
What’s NOT in a BOP
Workers’ compensation. Separate policy, mandatory in most states.
Commercial auto. Need separate coverage for business vehicles.
Professional liability/E&O. Need separate if you provide professional services.
Health insurance for employees. Completely different thing.
Flood and earthquake. Usually excluded, need separate policies.
BOP is a foundation, not comprehensive coverage for every possible risk.
How to get one
Any commercial insurance company or broker. Can often get quotes online for simple businesses. Larger or more complex operations might want to work with a broker who can shop multiple carriers.
When getting quotes compare: coverage limits, deductibles, what’s included vs what costs extra, any exclusions specific to your industry.
Don’t just pick the cheapest option. Make sure coverage is actually adequate. A $2,000 policy that doesn’t cover what you need isn’t a deal.
My friend’s bakery
Her BOP covers: general liability ($1M/$2M), commercial property ($150,000 for equipment and inventory), business interruption (12 months). She added an equipment breakdown endorsement for the ovens because those are expensive. Total premium about $2,500/year now—went up slightly since she opened.
Had one claim so far—someone slipped on wet floor, minor injury. General liability handled it. No lawsuit, insurance paid a small settlement, done.
Comprehensive is currently sitting in the flour bin—she found a gap in the chicken wire again—but the point with BOPs is don’t overcomplicate it. Small business, basic risks? BOP probably makes sense and saves money. Get quotes both ways and compare.
