How Much Is Business Owners’ Policy (BOP) Insurance Cost? (2023 Rates)

Thang Truong
Thang Truong
Updated on:

A business owner’s policy (BOP) is one of the most common types of small business insurance protection. It’s also one of the most misunderstood. And one of the least understood aspects of BOPs is how much they cost. 

This article will explain what you need to know about business owners’ policies — and their costs — so you can purchase one at a fair price.

How much does Business Owners Policy (BOP) insurance cost?

Based on our study, the average cost of a business owner’s policy is just under $100 per month or $1,200 per year. The median BOP premium is just over $50 per month or $600 per year. The median value is likely more representative of what small business owners can expect to pay because it doesn’t include outlier business premiums, resulting in a more accurate representation of insurance costs.

Approximately 12% small businesses pay less than $400 per year for a business owner’s policy and 48 percent pay between $400 and $800 annually. The rest pay more, with one out of four businesses spending upwards of $1,200 per year.

These are just the averages. Be sure to shop around with a few companies or work with a broker like CoverWallet or Thimble or Policy Sweet or to compare several quotes to find the cheapest one.

How much does BOP insurance cost for different small business types?

Insureon’s annual median BOP policy costs for small businesses in different industries, from highest to lowest:

  • Food and beverage: Just over $1,600.
  • Construction and contracting: Almost $900.
  • Nonprofits: Nearly $850.
  • Retail: Almost $800.
  • Healthcare: Just over $700.
  • Media and advertising: Approximately $550.
  • Building design: Approximately $550.
  • Real estate: Approximately $550.
  • Information technology: Just under $550.
  • Photo and video: Just over $520.
  • Cleaning services: A little over $500.
  • Insurance services: Approximately $500.
  • Consulting: Approximately $500.
  • Finance and accounting: Approximately $500.

Use these numbers as benchmarks. Your BOP policy costs will be based on the actual risks faced by your business, the value of its property, its size, and more. You must request multiple quotes from different insurance providers so you can compare them to get the coverage that’s right for you at the best price.

What impacts the cost of BOP insurance?

The level of risk your business faces, the value of your business property, its location, your policy limits and deductibles, years in business, industry experience, and other factors will impact the price of your policy.

Two key factors that drive BOP premium prices are:

1. Industry 

The industry you’re in has a significant impact on insurance prices, especially the general liability portion of your policy. Everything else being equal, business owners in high-risk industries pay higher premiums, while those in low-risk sectors pay lower ones.

For example, a busy restaurant is more likely to experience a customer injury that could require hospitalization than a tech consultant working out of a home office. 

Construction businesses and retail stores also usually have relatively high coverage costs. These industries typically have valuable equipment or inventory that may need to be replaced if damaged by a fire or weather incident or stolen.

2. Property value

The price of the commercial property insurance part of your BOP depends on the value of your business property, where it’s located, and how you choose to protect it.

Value of business equipment, supplies, and inventory.

The first step you need to take to protect your property is to know its worth by estimating its value. It will help you figure out the level of coverage it will take to pay the cost of replacing or repairing stolen, lost, or damaged items.

Building value, location, and age.

The value of your business building or buildings plays a big part in determining the property portion of your BOP premium. However, other property-related factors will impact your insurance costs, as well. One is where your business is located. All things being equal, a small retail shop in rural Indiana will cost much less to insure than a similar retail shop in a major California city like Los Angeles. The age of your building also affects coverage prices. Older buildings typically cost more to insure because they’re more susceptible to damage and less likely to be equipped with the latest fireproofing and risk protection systems, like alarms.

Replacement value versus actual cash value.

The cost of the property portion of a BOP varies depending on how you choose to insure it. You can cover it for its replacement value (price when it was brand new) or actual cash value (depreciated value when the loss occurred). Actual cash value premiums are less expensive than replacement value because they pay out less on claims.

Coverage limits

If you need more coverage for your business because its property is valued higher, it faces greater perils, or you want increased levels of protection, you’ll pay more for it. You want to get enough coverage to protect your business yet not too much that you’re spending unnecessary money on premiums. An insurance agent or professional at an insurance company can work with you to figure out how much coverage you need.

How can I get cheap my BOP insurance?

Here are some tips on getting cheap BOP insurance without compromising on coverage.

Compare several quotes

The only way to make sure you are not overpaying for your BOP insurance policy is to be sure to compare several quotes before making your final decision. Shop around with a new carriers and get quotes from each of them to compare. Or working with a broker like CoverWallet or or Thimble or Policy Sweet is a better and more efficient way to get and compare several quotes before you decide on the cheapest one for your business.

Pay your entire premium

Your business owner’s policy premium can typically be paid once a year or in monthly installments. You can save money if you pay annually because most insurers offer a discount for it.

Control your risks

If your organization doesn’t make claims, you’ll pay less for a BOP than a comparable one with a history of making them. The best way to prevent claims is to develop and execute a comprehensive risk management plan. Some things you could do are:

  • Develop an ongoing training program for employees that educates them on how to prevent workplace risks.
  • Invest in security and fire prevention systems.
  • Ensure you have all marketing and sales materials checked by a legal professional.
  • Create checklists about safety procedures and make sure they’re carried out.
  • Minimize hazards, such as storing unprotected flammable substances at your business locations.

What is a business owner’s policy?

A Business Owners Policy combines general liability and commercial property insurance. Some policies also add coverage for lost business income. The benefit of getting a BOP is that it typically provides the protection at a discount and makes it easy to add coverages based on your insurance needs.

What does a business owner’s policy (BOP) cover?

A BOP includes:

  • Property insurance covers harm and losses related to buildings and their contents owned by a company.
  • Liability protection covers your company’s legal responsibility for harm it causes to others. Harm occurs when you or an employee does something — or fails to do something — while conducting business that causes bodily injury or property damage to others (not employees).
  • Business interruption insurance pays for partial loss of income because something covered by your insurance prevents you from opening your business. It also covers the costs of operating out of a temporary location because your’s can’t be used due to the fact it’s been damaged by fire or something else covered by your insurance.

BOPs do NOT cover professional errors, vehicle accidents, and employee injuries. You’ll need separate insurance protection to cover professional services, vehicles, and your employees, which can be added to your BOP.

Which BOP coverage limits do small businesses choose?

The most popular business owner’s coverage is the $1 million / $2 million policy. It provides the following levels of protection: 

  • $1 million occurrence limit. The insurer pays up to $1 million to cover any single claim.
  • $2 million aggregate limit. During the lifetime of a policy, typically one year, the insurer will pay up to $2 million to cover claims.

Larger, more complex, or riskier businesses get BOPs with $2 million / $4 million limits. For most insurers, a higher level of coverage will cause premiums only to be incrementally more expensive.

Best Business Owners Policy (BOP) insurance companies

Many insurance companies offer BOP insurance to small businesses. It can be confusing and time consuming to determine where to buy a BOP policy for your business. We have done intensive research of BOP providers and here are the best BOP insurance companies that we recommend:

What other coverages do small businesses get?

A business owner’s policy makes it easy to add protections different types of businesses need. These can include:

Professional liability insurance

If you or the people who work for you sell advice or services to customers, you probably need professional liability coverage. It pays legal, settlement, and damage costs if you’re sued over the professional services you provide. Learn more at the best professional liability insurance companies.

Errors and omissions insurance

It’s easy for the people working for small companies to make mistakes while conducting business. This coverage will pay if you’re ever sued for something like a missed delivery or providing service that doesn’t meet a client’s expectations.  

Workers’ compensation insurance

If you have employees, your state will probably require you to get workers’ comp coverage. It provides benefits to your employees if they become injured or ill because of work-related reasons. It pays for medical care, lost wages, job training, and more should something unfortunate occur while on the job. Learn more at the best workers comp insurance companies.

Cyber liability insurance

Cyber coverage will pay damages if your business is ever the victim of a hack attack and customer, employee, or other valuable data becomes compromised. Learn more at the best cyber insurance companies.

Commercial umbrella insurance

If your business is ever the victim of an incident that exceeds your insurance coverage limits, umbrella protection could help make up the difference. Learn more at the best commercial umbrella insurance companies.

Commercial auto insurance

Do you or any of your employees drive company or personal vehicles for business reasons? You likely need commercial auto coverage. Personal car insurance won’t cover accidents that occur while driving for work purposes. Learn more at the best commercial auto insurance companies

Employment practices liability insurance

If you have employees, this is another coverage you may want to consider. It protects you if an employee sues you for discrimination, sexual harassment, or unfair employment practices. Learn more at the best EPLI companies

Directors and officers insurance

This insurance covers a company or its leadership if sued over business-related decisions. 

These are just a few coverages you could add to your BOP. An insurance agent or company representative can help explore your coverage options to completely and efficiently protect your business. Learn more at the best D&O insurance companies.

Thang Truong

Thang Truong covers small business insurance and small business success at BravoPolicy. He is a licensed P&C insurance agent. Previously, he held product leadership positions at, Capital One, NerdWallet, and Mulberry Technology. He holds a MBA degree from UC Berkeley - Haas School of Business.

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