What Businesses Qualify for a Business Owner Policy?
A business owner policy, or BOP provides combined property, general liability insurance and business interruption insurance coverage to eligible business owners.
There are limitations as to what businesses qualify for a BOP.
Generally, the insurer will look at the size of your business along with the industry risk to determine if your company qualifies for this type of policy.
It can be helpful to understand which businesses normally qualify so you can make the best decision when it comes time to insure your business.
Who Qualifies For a Business Owner Policy?
A business owner policy (also known as a BOP) is an insurance package designed for many small and mid-sized businesses.
Covering property insurance, general liability and business interruption insurance needs, this package policy is ideal for lower-risk companies who may not need a large commercial insurance program.
Insurance carriers often offer similar levels of protection under a BOP policy as they would through standalone policies. However, obtaining coverage this way is typically less expensive.
Types Of Businesses That Qualify For BOPs
- Office businesses
- Professional services businesses
- Contractors
- Small retailers
- Restaurants
- And more!
Small businesses with less risky operations tend to qualify for BOPs. Learn more about what kinds of businesses qualify below.
Size Of Business
Typically, BOPs are limited to smaller businesses.
Many large corporations have operations and properties that simply don’t fit the qualification standards set forth by insurance carriers.
While this varies by insurer, businesses that qualify for a BOP often:
- Have less than 100 employees
- Have lower revenue
- Own smaller commercial buildings or rental spaces
- Limit public exposure
That being said, there are some larger businesses that can qualify for BOPs. However, most are limited to one-location businesses that aren’t considered high-risk.
Property Location And Construction
Where your business is located will factor into whether or not you qualify for a BOP.
An insurer will take the following into consideration:
- The condition of the building
- Accessibility to fire protection and other safety measures
- Crime rates in the area
- Whether there is flood or storm damage risk
- The type of building you occupy
- Construction of the building
If you own your commercial building, insurers want to make sure that you do routine maintenance and have adequate safety protocols in place.
Businesses in high-risk locations may still qualify, but there could be additional underwriting processes or adjustments made to your policy.
Type Of Business
Just like construction and property location, the industry your business operates in will factor into your eligibility.
Certain businesses are not eligible for BOP insurance. These businesses tend to pose a higher risk for property damage and liability claims, such as:
- Roofing businesses
- Large construction companies
- Auto-related businesses
- Businesses with chemical exposure
- Heavy machinery usage
- High-risk warehouses
If you own a professional services business or low-risk retail business, you’re likely to qualify for a BOP.
Amount Of Inventory And Equipment
Businesses that do not have large amounts of inventory or expensive equipment are ideal for BOP insurance.
For instance, if you own a clothing store that carries trendy apparel, your property risk is less than a business that stores highly flammable materials or paints.
Insurance providers look at your inventory and equipment value and the potential risks they bring. These risks include:
- Fire
- Theft
- Operations taking place on a daily basis
If you have expensive equipment, your business may require additional coverage above the set limits of a BOP policy.
Number Of Employees
Along with your payroll, insurance providers look into the number of employees you have when qualifying your business.
If you only have a few employees that work in office settings, your risk for workers compensation claims and liability claims are less than if you had employees working with heavy machinery.
Businesses that deal with the public on a daily basis can still qualify for a BOP. However, insurers will evaluate your overall risk for liability claims.
Businesses are also looked at based on prior claims when determining qualification.
Why Businesses Love BOPs
Business Owner Policies have many benefits. They allow businesses to bundle different types of coverage into one simple policy.
Business owners love BOPs because they help save money on premiums and are easier to manage.
Business owners can also purchase additional coverage to enhance their BOP.
Some additional coverages that can be added to your BOP include:
- Cyber liability insurance
- Equipment breakdown protection
- Employment practices liability
- Data breach coverage
- Inland marine insurance
- Hired and non-owned auto insurance
Frequently Asked Questions
Do all businesses qualify for a BOP?
No, not all businesses qualify for a business owner policy. Some businesses may be considered too large or high-risk. Businesses that may be denied coverage may include those with:
- High-risk operations
- Large payroll
- Businesses that work with hazardous materials
- Poor claims history
- Businesses with complex liability exposure
Can I get a BOP for my home business?
In some cases, yes. Depending on how much revenue you make, the amount of inventory you have, and the level of risk presented when operating your home business, you could qualify for a BOP.
What insurance is included in a BOP?
A BOP includes property insurance, general liability, and business interruption insurance.
Does a business owner policy include workers comp?
No, workers’ compensation is typically a policy that is bought separately from your BOP.
Can BOPs be customized?
Yes! Many insurance carriers allow business owners to add endorsements to their policies. These endorsements can include, but are not limited to:
- Cyber liability
- Equipment breakdown
- Professional liability
- And more
If you have any other questions about BOPs, please contact Bowthorpe & Associates Insurance Producers today!