Business Owner’s Policy (BOP): What’s Bundled and What Isn’t

A Business Owner’s Policy, or BOP, is the standard starting point for small business insurance because it bundles the two coverages almost every business needs into one policy, usually for less than buying each separately.

What’s Actually Bundled

A BOP combines general liability coverage (third-party bodily injury, property damage, and advertising injury claims) with commercial property coverage (your building, equipment, inventory, and other business property) and typically adds business interruption coverage, which replaces lost income and continues paying fixed expenses like rent if a covered event forces you to close temporarily. Bundling these into one policy typically costs 10% to 15% less than purchasing general liability and commercial property separately.

What a BOP Does Not Cover

This is the part business owners get wrong most often: a BOP does not include workers’ compensation, commercial auto coverage, professional liability (errors & omissions), employee theft or dishonesty coverage, or flood and earthquake damage. Each of those needs its own separate policy. If your business has any employees at all, workers’ compensation is legally required in nearly every state regardless of whether you carry a BOP.

What It Costs in 2026

BOP insurance averages around $147 a month, or roughly $1,767 a year, for small businesses overall, though the range is wide: typical premiums run $500 to $2,500 a year depending on industry and risk. Low-risk service businesses can pay as little as $25 to $80 a month, while higher-risk operations like pressure washing or contracting can run well over $1,000 a month. Insurers price primarily on industry classification, revenue, location, and claims history.

Who Should Carry One

Almost any small business with a physical location, equipment, or inventory is a reasonable candidate — retail stores, offices, restaurants, and contractors are the classic buyers. A fully remote solo consultant with no physical assets and no client-facing liability exposure may get more value from a standalone professional liability policy instead, since a BOP’s property coverage would largely go unused.

Written by Samuel, Certified Public Accountant

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