Business owners policy (BOP)
Also known as: businessowners policy, BOP
A business owners policy (BOP) is a package policy that bundles commercial property and general liability coverage for small and medium-sized businesses in a single contract, usually at a lower cost than buying the coverages separately.
A business owners policy (BOP) is a pre-packaged commercial insurance policy designed for small and medium-sized businesses. It combines two core coverages in one contract: commercial property insurance for the building, business personal property, and loss of income after a covered event, and commercial general liability insurance for bodily injury and property damage claims against the business.
The defining feature of a BOP is that the package is standardized rather than assembled piece by piece. A typical BOP automatically includes business income and extra expense coverage — replacing lost earnings while a damaged shop rebuilds — and most are written on a special (open perils) form for the building and contents. Because insurers design BOPs for lower-risk businesses, eligibility is limited by criteria such as building size, annual revenue, and business class; a small retail store or office qualifies, while a large manufacturer generally does not.
A BOP does not cover everything a business needs. Commercial auto, workers compensation, and professional liability (errors and omissions) must be purchased separately. Larger or higher-risk businesses that fail BOP eligibility instead use a commercial package policy (CPP), which lets the insured pick and combine individual coverage parts.
Property and casualty licensing exams test the BOP alongside the CPP and workers compensation. Know what a BOP automatically includes, which coverages are excluded, which businesses are eligible, and how a standardized BOP differs from a build-your-own CPP.
Key takeaways
- A BOP packages commercial property and general liability coverage in one policy for small and medium-sized businesses.
- Business income and extra expense coverage is typically included automatically.
- Eligibility is restricted by size, revenue, and business class — lower-risk businesses like offices and small retail stores qualify.
- Commercial auto, workers compensation, and professional liability are not covered and must be bought separately.
- P&C licensing exams test BOP eligibility, included coverages, and the contrast with the commercial package policy (CPP).