Does Your Business Qualify for a BOP?

What insurers consider

• Business type and operations
• Annual revenue
• Number of employees
• Building size and construction
• Claims history

Often a good fit

Retail stores, offices, many service businesses, small restaurants and apartment buildings are common BOP candidates. Eligibility varies by insurer and state, and size limits differ widely.

Often not eligible

Higher-hazard operations, such as heavy manufacturing, bars with significant liquor sales or larger contractors, may need separate property and liability policies. An agent can say which route fits.

Why insurers limit BOPs

A BOP bundles property and liability at a set price structure for businesses whose risks are similar and predictable. To keep the package workable, insurers write rules on which business types, sizes and buildings fit. A business outside those rules is not uninsurable; it simply needs coverage written on separate policies or a commercial package policy that can be tailored.

Details that affect eligibility

• What you sell or do, described in plain terms
• Square footage you occupy and whether you own or lease
• Year built, construction and sprinkler status of the building
• Annual sales and payroll
• Any work done away from your premises
• Losses in the past several years

Changes during the policy

Tell your agent before adding a new location, a new product line or operations such as delivery, alcohol sales or installation work. A change can move a business outside the insurer's BOP guidelines, and finding out at claim time is far worse than adjusting the policy in advance.

Home-based businesses

A homeowners policy usually provides little or no coverage for business property and business liability. Some home-based businesses qualify for a BOP, while others are better served by a home business endorsement. The deciding factors are usually the type of work, visitors to the home and the value of business equipment.

Frequently asked questions