Business owner's policy (BOP)

A business owner's policy combines three coverages for small and mid-sized businesses in one contract: property on the building and contents, business income and extra expense, and general liability. ISO's version is the Businessowners Coverage Form, BP 00 03, and most carriers write their own. Packaging usually costs less than buying the pieces separately and means one application, one renewal and fewer gaps.

Eligibility is the limiting factor. Insurers accept only certain classes, such as offices, retail stores, many restaurants and light service businesses, below size limits on sales, square footage and employees that vary by carrier. Heavy contractors, manufacturers and high-hazard operations usually need a commercial package policy. A BOP excludes workers' compensation, commercial auto and professional liability, and flood and earthquake. Endorsements commonly add equipment breakdown, employee dishonesty, cyber, hired and non-owned auto and employment practices.

One distinctive feature: under the ISO form business income is paid as actual loss sustained for up to 12 months, with no coinsurance. Read the carrier's form to see if it matches. A growing business outgrows BOP limits quietly, so review them yearly. Start with What is a business owner's policy (BOP)?, and see BOP vs general liability if you are weighing the two.