Businessowners Policy
A package policy combining commercial property and general liability coverage into a single form, designed for small to mid-size businesses with standard insurance needs.
What It Is
The Businessowners Policy (BOP) is a package insurance product that bundles commercial property coverage and commercial general liability coverage into a single, simplified policy form. Introduced by ISO as the BP 00 03 form, the BOP provides broad coverage at a competitive premium for eligible small and mid-size businesses.
Standard BOP coverage includes: building and business personal property on a replacement cost basis, business income and extra expense coverage (typically with a 12-month limit), general liability including products-completed operations, medical payments, and additional coverages for debris removal, fire department service charges, and electronic data.
Eligibility is based on business classification, size, and revenue. Most BOPs are available for office-based businesses, retail operations, restaurants (under certain conditions), apartment buildings (under 6 stories), and similar standard risks. Large or complex operations typically don't qualify.
Why It Matters for Brokers
The BOP is the workhorse policy for small commercial accounts, and most agencies have hundreds of BOP clients. Brokers must understand BOP eligibility, coverage inclusions, and limitations because the simplified form can create assumptions about coverage that don't hold. For example, the BOP's business income coverage may have different sub-limits and conditions than a stand-alone business income form. Additionally, many BOP-eligible risks have exposures that require separate coverage (commercial auto, workers comp, cyber, professional liability).
Real-World Example
An accounting firm with a small office lease needs commercial insurance. The broker places a BOP providing $200K in business personal property coverage, $1M/$2M general liability, 12 months of business income coverage, and $5K in medical payments. The annual premium is $2,800 — significantly less than purchasing separate property and liability policies. The broker also recommends a separate professional liability (E&O) policy and cyber coverage, which the BOP does not include.
Common Mistakes
- 1Assuming the BOP provides complete coverage when it excludes auto liability, workers compensation, professional liability, cyber liability, and employment practices liability — each must be placed separately.
- 2Not reviewing the BOP's business income limit, which may be insufficient for businesses with high revenue — the standard 12-month limitation may not cover extended restoration periods.
- 3Failing to compare BOP pricing and coverage against separate monoline policies for larger accounts, where monoline placement may actually provide better coverage and competitive pricing.
How brokerageaudit.com Handles This
Policy Checker processes BOP policies and identifies all included coverages, sublimits, and exclusions. The system flags coverage needs that the BOP doesn't address (auto, workers comp, professional liability, cyber) to ensure the client's complete insurance program is in place.