How much is BOP insurance?

What is a business owner’s policy, or BOP?

A business owner’s policy bundles essential insurance coverage, such as general liability insurance and commercial property insurance, into a single, affordable package. It’s usually cheaper to purchase a BOP than to buy general liability and commercial property separately. Insureon lists the average price of general liability insurance at $735 a year and commercial property at $800 a year.

“For many businesses, a BOP is a particularly convenient and cost-effective package that combines all their essential insurance coverages, making it easier and more affordable to protect themselves without purchasing multiple policies,” says Andy Lea, chief insurance officer at Embroker, an online insurance broker.

Of course, what your company actually pays for BOP insurance will depend on various factors. Besides location and business type, coverage limits, past claim history and the insurance company you choose are other factors that affect the prices.

Quick coverage

The average premium for a business owner's policy (BOP) is $684 per year.
BOP premiums depend on factors such as location, industry, business size, claim history, coverage limits and deductibles.
You can lower your BOP premium by raising your deductible and paying your annual premium in full.

What a BOP covers

A business owner's policy combines two of the more common policies, general liability insurance and commercial property insurance, at a discounted rate. It also often includes business interruption insurance.

General liability insurance protects a business legally and financially against third-party liability claims of bodily injury and property damage. It also covers lawsuits related to reputational harm, libel, slander and copyright infringement. For example, general liability insurance will cover claims related to customer injuries and customer property damage. It will pay a settlement to a third party and cover the business’s legal fees and court costs.

Commercial property insurance covers the cost of repairing an owned or leased business location that gets damaged in a covered peril, such as a fire, windstorm or break-in. It also covers damaged or stolen business property, like furniture, inventory and equipment.

Business interruption insurance replaces a business’s lost income if it has to temporarily close down following a covered event, like a grease fire in a restaurant.

What a BOP does not cover

In most cases, a business owner's policy excludes the following:Professional liability insurance. Also known as Errors and Omissions (E&O) insurance, this protects you from third-party claims of loss due to negligence, oversight, malpractice or other mistakes.

Commerical auto insurance. If your business owns or leases vehicles for work, and your employees drive for business purposes, you'll need this coverage.

Workers' compensation. If an employee gets sick or is hurt on the job, workers’ comp pays for their medical bills and lost wages until they can return to work.

Health insurance. Medical coverage for employees is offered through providers that offer group plans.

Average cost of a business owner’s policy in the U.S.

The national average premium for a BOP is about $684 a year, but costs differ depending on location and other factors. Some states have much higher rates than others. For example, the average cost of BOP insurance in New Jersey is $1,002 per year, but in the neighboring state of New York, the average rate is only $896 per year. Here’s a look at the national average and the rates in two of the most populous states:

National average: $684 annually
Louisiana: $1,074 annually
Minnesota: $612 annually

BOP insurance cost by state

Below, is the average annual BOP insurance rate in the 25 most populous states, based on data from Insureon.

State	Avg. annual BOP premium
California	$711
Texas	$877
Florida	$916
New York	$896
Pennsylvania	$743
Illinois	$699
Ohio	$749
Georgia	$788
North Carolina	$650
Michigan	$859
New Jersey	$1,002
Virginia	$657
Washington	$762
Arizona	$800
Tennessee	$843
Massachusetts	$751
Indiana	$708
Missouri	$854
Maryland	$698
Wisconsin	$724
Colorado	$878
Minnesota	$612
South Carolina	$932
Alabama	$1,018
Louisiana	$1,074

BOP insurance cost by industry?

Another big factor that determines BOP insurance premiums is the industry. In general, businesses that operate in high-risk industries have the most expensive average BOP insurance rates.

For instance, the average BOP premium for construction businesses is $1,173 per year, whereas the average rate for media and advertising businesses is $670.

In the following table, you can see the average annual BOP insurance premium for various business types, according to Insureon.

Industry	Avg. annual BOP premium
Building design	$648
Cleaning services	$907
Construction	$1,173
Food and beverage	$1,770
Healthcare professionals	$841
IT/technology	$550
Landscaping	$1,130
Media and advertising	$670
Photo and video	$570
Professional services	$566
Retail	$1,136
Sports and fitness	$800

How much do insurers charge for a business owner's policy?

Different insurers charge different rates for business owner’s policies. Here are just a few examples:

The Hartford: $85 per month
Hiscox: Starts at $41.67 per month
Progressive: $113 per month
Thimble: $108 per month

Getting quotes from different companies to compare coverages, costs and the availability of optional add-ons can ensure you get the right coverage at the best price for your company.

Which are the best BOP insurance companies?

Small business insurance broker Insureon, on its website, rate a number of BOP insurers, including:

The Hartford
Liberty Mutual
Chubb
Acuity
Nationwide

What factors affect BOP insurance costs?

In addition to location, business type and the insurer you choose, other factors that affect the cost of a BOP include:

Business type: High-risk businesses, such as construction and retail, often have higher BOP premiums than low-risk businesses, such as professional services firms.
Business size: Insurance companies consider the size of your business and the number of employees when calculating BOP rates. Large businesses that need more coverage often pay higher rates than small businesses with lower coverage requirements.
Location: Insurance company The Hartford says businesses in areas with high crime or vandalism risks or those in areas that experience extreme weather can see higher rates.
Coverage limits: The coverage limits of your BOP insurance policy affect the cost. If you need high coverage limits for general liability insurance or commercial property insurance, you’ll pay a higher premium overall.
Deductibles: The commercial property insurance portion of a BOP has a deductible – what you pay out-of-pocket when you file a claim. The higher your deductible, the lower your rate. Insureon says its customers usually choose a $500 deductible.
Claims history: Businesses that have filed insurance claims in the past are considered riskier to insure. If your business has reported multiple claims in the past few years, you can expect to pay a higher rate for BOP insurance.
Business property value: The value of your business property, which includes the value of the building and the business property inside, contributes to your premium. The higher the value, the higher your premium will be.
Reimbursement type: There are two types of claim reimbursement for commercial property insurance – replacement cost value (RCV), where your insurer pays the actual cost to repair or replace your damaged property, and actual cash value (ACV), where your policy pays to repair or replace your property at its depreciated value. An RCV policy has a higher premium, but it provides larger settlements if you have a covered loss. ACV policies are cheaper, but depreciation is factored into your payout.

How to save on a business owner's policy

If you think the price of a BOP policy might be too expensive, there are a number of ways you can reduce your premium. For instance, you can:

Increase your deductible: To reduce your BOP insurance premium, think about raising your commercial property insurance deductible. However, make sure you can afford a higher amount if you need to file a claim.
Talk to an agent: An agent can tell you what discounts you’re eligible for and provide other strategies for reducing your premium.
Shop around: If you think you’re paying too much for BOP insurance, shop around. You might be able to find a cheaper rate through a different carrier.
Look for discounts: Many insurance companies offer discounts that can lower your premium. You can often find discounts for paying your annual premium in full and enrolling in automatic payments.
Review your policy annually: It’s a good idea to review your BOP annually to make sure your coverage needs are met. You might be able to lower your coverage limits to save money if your property value or replacement cost is less than it used to be.
Improve your risk management practices: Consider improving your safety and security practices to save money. Some insurers provide a discount for installing a burglar alarm system, smoke detectors or fire sprinklers in your business space.

What our expert says

Q: What’s the advantage of a BOP?

Andy Lea Chief insurance officer at Embroker, a digital insurance company.

"For many businesses, a BOP is a particularly convenient and cost-effective package that combines all their essential insurance coverages, making it easier and more affordable to protect themselves without purchasing multiple policies."

FAQ: BOP insurance cost

Do deductibles impact BOP insurance costs?

Deductibles can have a big impact on the cost of BOP insurance. The higher your deductible is, the lower your premium will be. Conversely, choosing a lower deductible will result in a higher premium. While choosing a high deductible can help you save money, keep in mind that you’ll receive a lower payout if you have a covered loss.

Can I customize a BOP with add-ons?

Yes. You can add endorsements to your business owner’s policy. Insureon, the small business insurance broker, offers the following examples: A contractor that carries tools and other gear to different job sites could include inland marine insurance to protect equipment in transit and a bar owner could include liquor liability to cover the actions of intoxicated customers.

Is a BOP legally required?

No. But many landlords require proof of liability insurance, which BOP provides. Business owners should evaluate their risk to determine if they need a business owner’s policy, which combines coverage for commercial property, general liability, and loss of business income.

How does a home-based business benefit from BOP?

A home-based business may need several different types of insurance, including general liability and commercial property. A BOP, which combines both types of coverage, can usually be cheaper than buying those policies separately.

What if my business operates in multiple states?

You should be aware that different states have different requirements and that many insurance companies don’t operate in all states. Check with your insurance agent if you need to cover different business locations.