A business owner’s policy (BOP) is, in short, a combination of two important forms of insurance – commercial property and liability – into one convenient package. You insure your property and protect yourself from lawsuits, adverse consequences and accidents, and it costs less than buying two insurances separately.

How does a Business Owner’s Policy work?

This type of insurance for business owners combines coverage for all major property and liability risks in one insurance package. This is a very useful option, especially for small business owners or those just entering the market. In just a single package, you'll gain protection against the major litigation risks your small business may face: including those arising from personal injury and property damage, product liability or personal attacks.

A Business Owner Policy also typically insures buildings (which may belong to your business or be leased by it, like offices). This insurance for business owners can also cover any items owned by the business or items owned by a third party but temporarily kept in the custody of the business or the business owner – you can insure office equipment or a rented car, as long as you normally store them on the business premises.

Managers sitting at the desk and talking about the new policy of the business owner.

Business owner's policies also provide compensation if your building or other company-owned property is damaged as a result of an event covered by the policy. These types of policies usually protect against natural disasters like fires or hurricanes, and common crimes like theft or vandalism.

How am I protected by Insurance for Business Owners?

Let's take a closer look at how you can protect yourself by paying only the cost of the policy.

  • Most small businesses are exposed to the risk of random disasters like fire, theft and weather-related damage. This is the most common reason why business owners choose insurance. Without a business owner's policy, you would be forced to cover these losses on your own. With insurance, your policy will provide funds for repairs, replacing damaged items and helping your business rebuild.
  • If your business is open to people, you are liable if they meet with an accident while on your property. Risk of bodily injury to third parties is very important for manufacturing companies, but service providers or restaurant owners can also benefit. With a Business Owner's Policy, you can compensate that person and cover legal costs.
  • Similarly, there is also the possibility of damage to third-party property – if you or one of your employees damages someone else's property, you are responsible for the cost of repairing or replacing that item. Your business owner's policy covers these costs.
  • If you manufacture products, your company may sometimes be liable for their use – liability damage is especially significant if the goods are used according to their purpose. A business owner's policy provides a financial safety net and can help with litigation costs.
  • Some company policies also protect you against speech-related business costs. They can protect you from the cost of a lawsuit related to defamation or copyright infringement – very useful for advertising or media companies.

How can my business be protected by the business owner policy?

In addition to providing financial protection for a small business, BOP also protects medium and larger businesses, especially those heavily dependant on owning real estate. With Business owner's policy, accidents and lawsuits will not deprive you of your business. You can grow safely with it. Business owners who are about to open their own small company could learn more about such insurance models on our blog.

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Not all companies qualify for the business owner policy. Eligibility requirements vary between providers, and can vary from country to country or state to state in the US. To get this insurance you must meet certain requirements regarding the location of your company, the size of your location, your revenue, and the class of your company.

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