BOP Insurance (Business Owner’s Policy) in Massachusetts

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What is BOP insurance?

B.O.P. insurance stands for business owner’s policy. A BOP is a simplified bundle of at least two essential business coverages. It’s designed for small businesses in certain low-risk industries (see more on who is a good candidate for a BOP below). By combining several policies into one, some businesses can meet their primary insurance needs and save money, rather than buying each coverage individually.

Many businesses, like dry cleaners, are good candidates for BOP insurance coverage

What are the advantages of BOP insurance compared to other business insurance options?

For those who qualify, a BOP is a simple combo pack of commercial property, general liability, and (often) business interruption insurance. Buying all three together helps many businesses save money. For those with “busy seasons” (e.g., ice cream parlors or florists), BOPs can also help by automatically providing a 25% increase on the normal coverage limit for business personal property (e.g., freezers full of ice cream in July).

Which coverages are included in a BOP insurance policy?

There are two main types of coverage that every BOP will include, regardless of where you buy it:

Continue reading to learn more about what these components entail.

Beyond these two coverages, it’s difficult to say exactly what BOP insurance includes, because every carrier structures its products differently. Many carriers automatically provide loss of income/business interruption insurance as part of their BOP. Some make this protection available as a voluntary add-on (also known as a rider or endorsement). In other words, you may need to request additional types of coverage that don’t come standard with your BOP.

What does commercial property insurance (Section I of a BOP) cover?

If you own or rent space to conduct your business, the commercial property portion of your BOP can help protect you against certain types of a physically-damaging disasters. The most common of these include fire, windstorm, explosion, burglary, riots, and vandalism. In addition to protecting your building’s structure, property coverage also includes building contents (things like furniture, computers, equipment, and product inventory).

Keep in mind though, with a BOP, as with any insurance policy, details are very important. Exclusions often apply. Without getting too deep in the weeds, let’s consider just one example: computer equipment and electronic data. Under the property portion of your BOP, business computers may be covered against perils like fire or theft, but not against power surges caused by utility disruption. Further, your electronic data and software may not be covered at all. Depending on your carrier and policy language, you may need to add separate protection for different types of hardware/software/data losses. This is just one example of why it pays to discuss your unique operations with an experienced agent.

What does general liability insurance (Section II of a BOP) cover?

“General liability” is coverage that protects you against third-party claims. A third party is anyone who doesn’t work for your company. It could be a client, a competitor, or a member of the public. Potential claims could include bodily injuries (someone slipped and fell in your parking lot); damage to personal property (your ladder crashed through someone’s window); or allegations of false advertising/libel/slander (your intern posted on Facebook that ABC Competitor has a rat problem in their kitchen). General liability is designed to step in—in all of these cases—and help to pay your legal defense and/or financial settlement, up to a preset limit.

NOTE: if you don’t qualify for a BOP, you can buy general liability insurance all by itself, or as part of a different type of commercial insurance package.

What does BOP insurance NOT include?

Policies vary. But with a BOP alone you are NOT getting coverage for:

There may be other noteworthy omissions, too (protection you need that is not included), depending on your unique risk profile.

Are all BOP insurance policies the same?

No! Definitely not. And this is an important point to keep in mind when browsing for business insurance—especially if you’re shopping for a BOP quote online. Many small biz owners and startups are tempted to accept the first insurance quote they find. The problem is that business insurance requires expert advice, ideally from a local agent who insures other companies like yours, in your state.

Some BOPs, for example, will only cover “named perils” for property damage. That means if the type of loss event (fire, wind, vandalism, theft) isn’t specifically listed on your policy, your insurance company won’t cover it. Others—known as “all-risk” or “open-peril” BOPs—come with broader coverage terms. They cover all types of general liability and property claims except for those that are specifically excluded.

So, which type of BOP should you buy? An experienced agent is a great source of information, when it comes to combing through potential losses, deciding what’s important, and understanding how BOP insurance will or won’t respond.

What does BOP insurance cost?

The cost of BOP insurance is primarily a function of your company’s size, industry (i.e., how risky your work is), and prior loss history. Your desired coverage limits also play a role, as does the scope of your property. Companies with few employees and modest sales need less insurance and therefore pay less in premium. Likewise, companies with smaller footprints (small office, one computer) pay less than those with large, equipment-filled warehouses and multiple locations.

Here’s a list of key factors that could impact your BOP premium:

  • General Liability Class Code (riskier types of work will raise your premium)
  • Prior Loss History (size and nature of insurance claims filed in the past)
  • Coverage Limits (opting for higher limits could raise your premium)
  • Replacement Cost Value vs. Actual Cash Value Coverage (opting to insure your property for what it’s worth brand new vs what it’s worth right now)
  • Size (square footage) and Number of Commercial Properties
  • Value of Business Contents/Business Personal Property
  • Standard BOP vs. All-Risk BOP
  • Any Loss Control Measures in Place (security systems, safety training, etc. could help to reduce your premium)

Which types of business qualify for BOP insurance?

We mentioned earlier that BOPs typically apply to small, low-risk businesses. Retail stores, barber shops, beauty parlors, fitness centers, churches, dry cleaners, and certain types of contractors: these are all potential candidates for a BOP.

On the other hand, businesses that routinely encounter more serious risks—bars or nightclubs, roofing companies, utility contractors, snow removal contractors, arborists, etc.—will likely need a more tailored commercial insurance package. Further, if a significant portion of your work is conducted “off premises” (i.e., you routinely travel to different job sites), you may not qualify for BOP insurance.

Where can I buy BOP insurance in MA?

If you’re interested in getting a BOP insurance quote, your first step should be a phone call with a Massachusetts business insurance agent. He or she will gather some basic facts about the type of services you perform or any products you sell, then offer advice on what makes sense for you.

Not every business will qualify for BOP insurance. Some companies are simply too large, too complex, or too unique to align with this type of bundle. But that’s okay! There are other types of commercial insurance packages available—sometimes through specialty carriers that cater to your industry. So even if a BOP isn’t right for your business, ask our agents to help you combine the necessary coverages and save.

Which additional types of coverage can/should be added to a BOP?

The answer will be different for every business, depending on where you work and what you do. Some common endorsements or add-ons to BOP coverage may include:

  • Business Crime/Employee Theft Insurance – coverage that protects your business from various types of employee theft, including payroll fraud, forgery, embezzlement, and more
  • Employment Practices Liability Insurance (EPLI)  – coverage that reimburses you for legal defense costs and/or settlements arising from claims of discrimination, wrongful termination, sexual harassment, and more
  • Cyber Attack Insurance – coverage that can help your business recover from a cyber attack, including phishing scams and ransomware attacks
  • Professional Liability Insurance – coverage that protects you and your team from any professional errors or omissions you make, while advising clients or performing your work.
  • Flood and Water/Sewer Back-up Insurance – coverage to protect your commercial property, for specific, water-related loss events sometimes excluded by BOPs
  • Earthquake Insurance – yes, earthquakes can happen even in Massachusetts. And without an added endorsement, any damages may not be covered.

There are many other coverages you may need to consider, specific to your industry and your operation. Not all of them are available as endorsements to a BOP. (Worker’s comp and commercial auto, for example, are essential for most businesses.) Instead, you may need to purchase these add-ons separately, or bundle them into a different type of commercial insurance package.

Is BOP insurance right for my company?

Great question. The best way to find out is to contact a licensed, local agent—like the ones who make up our commercial lines team. Here at C&S, we’ve been advising Massachusetts business owners for 60+ years. Connect with us at 508-339-2951.

Why call C&S for BOP insurance quotes and info?

If you own a business in Massachusetts, our team is the ideal partner for you. Here are just a few reasons why:

We have access to all the top carriers for business insurance. This means we can give you more options than other agencies. More options mean more competitive pricing and, quite often, better terms.

We maintain a dedicated Claims Department, so there’s always someone on hand to support you when something goes wrong. Dedicated claims help also means your claims get closed out faster, which is key to maintaining a healthy loss history.

We offer in-house registry services and RMV “runners.” This means fewer trips to the RMV for most of our clients, and a lot less hassle managing your Massachusetts commercial plates.

Our team of commercial agents are among the best in the business. You won’t find a more dedicated, knowledgeable crew anywhere in the Bay State. So, let us work for you. Call 508-339-2951.