BOP vs GL + Property Separately: How to Decide Which Costs Less for Your Small Business
Updated: 5 days ago
When a small business shops for insurance, one of the first choices is whether to buy a Business Owners Policy (BOP) or to buy general liability and commercial property as separate policies. A BOP is usually the simpler and cheaper option for a small business that qualifies. But not every business qualifies, and a BOP isn't always the right fit.
This guide explains what a BOP includes, when separate policies make more sense, and how to compare quotes fairly.
What a BOP includes
A BOP packages three core coverages into one policy:
General liability. Pays if your business injures someone or damages their property, for example a customer who slips in your shop.
Commercial property. Covers your building (if you own it), your equipment, furniture and inventory.
Business income. Replaces lost income and pays ongoing expenses if a covered loss, such as a fire, forces you to close for a while.
Many BOPs also include or offer smaller add-ons, such as equipment breakdown, small amounts of coverage for money and securities, and limited data-breach coverage. What's included varies by insurance company.
Why a BOP is often the better buy
One policy, one renewal date, one bill. Less to track.
Package pricing. Insurance companies design BOPs for small businesses with common risks, and the package price is often lower than buying the same coverages separately.
Fewer gaps. When one fire damages your building and closes your business, a single policy handles the property damage and the lost income together.
Who usually qualifies for a BOP
BOPs are built for smaller businesses with fairly standard risks, such as:
Offices and professional services
Retail stores
Many restaurants and coffee shops
Light contractors and service trades
Small apartment and commercial building owners (with some insurance companies)
Each insurance company sets its own limits on size (revenue, square footage, building value) and on which types of business it will write.
When separate policies make more sense
Your business type isn't eligible for a BOP. Higher-risk operations, such as some manufacturing, heavy construction trades, bars with mostly alcohol sales, or businesses with unusual hazards, often have to buy separate policies.
Your property values are too high for the BOP. Many BOP programs cap building and contents limits. A large building or a lot of inventory may need a separate commercial property policy.
You need coverage a BOP can't hold. Specialty exposures may need their own policy from an insurance company that specializes in them.
One insurance company is much better for liability and another for property. Sometimes splitting saves enough to make up for losing the package price. It's worth checking, not assuming.
What a BOP does not cover
Whichever way you go, these are separate policies:
Workers' compensation. Required in Minnesota for most businesses with employees.
Commercial auto. Vehicles owned by the business. (Some BOPs offer hired and non-owned auto for employees who drive their own cars on business errands.)
Professional liability (E&O). Mistakes in professional advice or services.
Liquor liability. Needed if you sell or serve alcohol.
Cyber liability beyond any small amount included in the BOP.
How to compare quotes fairly
A lower price only means something if the coverage is the same. Line up these points side by side:
Liability limits: per occurrence and aggregate (for example, $1 million / $2 million).
Property limits: building and contents. Are they enough to rebuild and replace?
Business income: is it a dollar limit or "actual loss sustained" for a set number of months?
Deductibles for property and liability.
Exclusions and add-ons: equipment breakdown, spoilage (for restaurants), sign coverage, data breach.
Total cost of everything you need, including any separate policies the BOP doesn't cover.
If your renewal went up
A big increase at renewal usually has a reason: a claim, a change in your business type or size, higher property values, or a rate increase across your industry. Splitting into separate policies rarely fixes that by itself. Start by asking your agent to shop the BOP with other insurance companies. If every BOP quote comes back high, then price the separate-policy route as well.
FAQ
Is a BOP cheaper than buying separate business policies?
For most small businesses that qualify, yes. It's still worth comparing, especially if your property values are high or your business type is borderline.
Does a BOP include general liability?
Yes. General liability is one of the three core parts of a BOP, along with commercial property and business income.
Can I buy general liability without property coverage?
Yes. Businesses with little or no property, such as some consultants and contractors who work at customers' locations, often buy general liability on its own.
Does a BOP cover my employees if they get hurt?
No. That's workers' compensation, which is a separate policy.
What size business can get a BOP?
It depends on the insurance company. Each sets its own limits on revenue, building size and value, and business type.
Not sure which setup fits your business? Call City Insurance and Financial Services at (763) 582-1888 or contact us. You can also apply online for a BOP or general liability.
City Insurance and Financial Services, Minnetonka, MN.
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