Business Owner’s Policy (BOP)

A business owner’s policy, also known as a BOP, is a package that suits small to mid-size businesses. It typically includes three main types of coverage: property insurance, business income (aka business interruption insurance), and liability insurance.

Businesses who face only a certain limited amount of risk may qualify for a BOP. Two factors that determine a business’ eligibility are: type of business, and square footage. Businesses with specific risks, like a jewelry store, a shipping company, or a manufacturing factory, would not likely qualify for a BOP. However, home-based businesses, or businesses with a relatively small amount of employees are likely candidates.

Some examples of the particular types businesses that use BOPs are:

  • Office buildings tenants
  • Buildings used primarily for retail or services like clothing stores or coffee shops
  • Dentists, attorneys, and accountants
  • Counselors and mental health professionals
  • Small strip malls with low risk tenants such as advertising and insurance agencies, specialty retail such as frame or fabric stores, and foods such as yogurt shops, deli’s and bakeries.

Overall, the BOP is a lower cost option for covering property and liability versus purchasing individual policies. It does not include worker’s compensation, health or disability insurance, commercial auto insurance, or professional liability.

Commercial Package Policy (CPP)

Just like a BOP, a Commercial Package Policy allows you to combine individual coverages under one policy. When your coverage needs exceed a BOP, business owners typically turn to a CPP. It’s a flexible approach to customizing your insurance needs without paying for policies separately which could get relatively costly. CPPs are available to businesses that are outside of the allowed classifications for a BOP policy.

A basic CPP will typically include property insurance and general liability insurance, just like a BOP. From there, additional coverage forms can be added.