A small or medium sized business faces a number of risks above and beyond trying to keep up with the competition. From liability for accidents such as slips and falls that occur on the company’s premises to lawsuits against a business by the general public to natural disasters or other events that disrupt the ability of a business to operate, the risks a business faces in today’s litigious society are both numerous and serious.
A powerful tool many small businesses use to protect themselves is a business owners policy (BOP). This type of commercial insurance bundles multiple types of coverage together to offer business owners protection from the most common legal and business risks they are likely to face. This guide will provide you with an in-depth explanation of everything you need to know about business owners policies, including what they cover, how much they cost and what to look for when shopping for one. Additionally, we’ll share information about some of the top BOP providers, including the three below:
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*By clicking the above links, you will go to one of our insurance partners. The specific companies listed above may not be included in our partner’s network at this time.
Understanding Commercial Insurance
Besides risks associated with the business cycle and the ability of a business to produce and market products or services that appeal to customers, the risk of costs related to natural disasters, accidents, and legal liability must be considered by anyone running a business. While taking the steps necessary to successfully run the business are the responsibility of a business’s executive leadership, commercial insurance is generally purchased as a first line of defense against risks stemming from accidents, disasters, and legal liability.
These risks tend to be unpredictable, making it difficult for a business owner to budget for them. One report found that almost 40% of businesses failed after a disaster struck, with that percentage rising even higher for small businesses. Purchasing commercial insurance, with the associated monthly or yearly premium payments, makes it possible for business owners to protect themselves against these risks at a fraction of the cost they might otherwise pay if such an incident occurred. As a result, even if such an event never happens, the premiums paid generally won’t unduly impact the business’s profitability.
What Is Commercial Insurance?
Commercial insurance, also known as business insurance, refers to a policy that covers any and all risks associated with running a business. These risks can range from liability for accidents suffered on an organization’s premises to damage to property or possessions caused by natural disaster, liability stemming from intellectual property disputes, errors and omissions, etc. Essentially, commercial insurance helps protect your business against a wide variety of risks related to operating the business.
For small businesses especially, commercial insurance can serve as the first line of defense against a lawsuit that could threaten to significantly damage the company’s profitability or even place its ability to stay in business at risk.
One study showed that small businesses were responsible for paying a whopping 53% of the total commercial liability costs generated by the U.S. tort system. Additionally, businesses with revenue under $1 million annually, while accounting for around 7% of total revenue, were saddled with a disproportionately high 39% of total commercial tort liability costs. Another survey found that a significant number of small business owners (43%) reported either becoming involved in or having been threatened with a civil lawsuit.
There are a variety of commercial insurance policies a business owner can choose from. Generally, they protect against financial loss from risks or liabilities such as:
- Lawsuits by customers
- Property theft and damage
- Customer or employee injury
- Unexpected occurrences
Commercial insurance policies are typically designed to cover specific risks, with each policy tailored to protect your business against liabilities associated with the risk in question.
Understanding Business Owners Insurance
When selecting a policy to protect their business, business owners are faced with a variety of risks. While purchasing insurance to defend against every risk is not likely to be feasible from a cost standpoint, protecting your business against the most common risks is a more cost effective goal. Offering coverage for these risks is the objective of BOP insurance.
Owners of small businesses can protect themselves from risks such as lawsuits by members of the general public or those related to incidents that occur on their business premises as well as unexpected events that interrupt business operations. Purchasing insurance of this type helps protect your business from risks that could seriously impair the business’s ability to function, but without the expense of trying to defend against every risk your business might face.
What Is Business Owners Insurance?
Business owners insurance is a form of commercial insurance that combines general liability insurance, commercial property insurance, and business interruption insurance into a single policy. Small businesses generally have a need for all of these coverages when they either own or rent commercial property such as an office or industrial space. In some cases, obtaining general liability coverage is required by client contracts.
Whether or not it is required, a BOP can be beneficial for small businesses that come into direct contact with the public. The coverage such a policy provides offers protection both against liability stemming from customer accidents and from incidents such as burglaries or fires.
These policies are intended to offer coverage for the most common types of insurance claims for small businesses operating in low-risk industries. Generally, for businesses that qualify, they are less expensive than if you bought three separate policies to cover general liability, business interruption, and commercial property insurance separately.
Business Owners Insurance vs. Commercial General Liability Insurance
While general liability insurance will cover third-party lawsuits by members of the public against your business, it does not extend to damages or losses to equipment, buildings, and inventory. Thus, if you own valuable property, taking out general liability insurance alone leaves you vulnerable to burglary, fire, and other hazards that can harm your property.
Business owners insurance typically includes commercial property insurance which does cover these risks. Many businesses have a significant amount of value tied up in their property, equipment, and inventory. Shielding these assets from risks due to the variety of hazards which can harm them can offer a business owner the peace of mind of knowing they are protected against serious financial losses from such incidents.
Business Owners Policy (BOP) vs. Commercial Package Policy (CPP)
While it’s clear that business insurance is an important first line of defense against the dangers posed by unanticipated events to a business’s ability to operate, selecting the best policy for your business can be a challenge. While a BOP has advantages over purchasing separate policies from a cost and simplicity standpoint, another bundled policy that a business may want to consider is commercial package policy (CPP).
A CPP is typically more flexible and customizable than a BOP, with a greater menu of options to choose from, but it is also generally more expensive. This, along with the higher coverage limits such policies offer, generally make them more suitable for larger businesses with more complex risk profiles.
How Does Business Owners Insurance Work?
The premiums you pay to purchase business owners insurance provide you with the protection delivered by the main coverages of such a policy—general liability, commercial property and business interruption—along with any additional endorsements. Such coverage has limits that stipulate the maximum amount covered per claim and for the policy as a whole over a specified coverage period.
In addition to coverage limits, there are deductibles associated with most policies, which must be met before coverage kicks in. For instance, if your business suffered $10,000 of commercial property damage, and the policy has a $1,000 deductible, you would receive $9,000 to cover the loss, rather than the full $10,000.
Another important aspect of a BOP to understand is what risks the policy covers. Policy limitations apply to what is covered as well as how much is covered. For instance, while slips and falls on your premises are likely to be covered, what if a fall happens to an employee making a delivery. Or if your product causes an injury off your premises. It’s important to understand exactly what is covered when evaluating BOPs to see which policy best fits your business’s needs.
Most BOPs are sold as named risk policies. This means that the only risks covered are those specifically enumerated in the policy. Some insurers offer open peril, or all risk, policies which cover a much wider range of risks. Essentially, these policies cover all risks which aren’t specifically excluded in the policy.
When an insurance policy is purchased, the policy period determines when the policy is considered to be in effect. Typically coverage periods are for one year or six months. Less common are monthly coverage periods.
Understanding how claims can be made with regard to the policy period is important when determining whether to purchase a claims-made or occurrence policy. Most business insurance is sold as claims-made, reflecting that the insurer will compensate you for claims made during the policy period. Claims occurring on or after the policy’s retroactive date would also be covered. If you have an occurrence policy, coverage is provided for claims relating to incidents that occur within your policy period, regardless of when the claim is filed. Thus, if you are sued for a slip and fall on your premises that occurred when you had a policy in effect, you would be covered even if the claim occurred after you ended your policy. Because of the extended time period for which claims can be made, occurrence policies are typically more expensive.
What Types of Businesses Need a Business Owners Policy
BOPs are most commonly purchased by smaller businesses operating in certain non-high risk industries. Eligibility requirements to buy these policies typically restrict companies operating in higher-risk industries from acquiring BOPs. These requirements typically include factors such as facility or office size, business location, amount of revenue and type of business. A BOP may be appropriate for a business with a brick and mortar retail store or office or one that offers physical products for sale. Essentially, any business with assets can typically benefit from acquiring a BOP.
A BOP typically offers cost advantages over purchasing its component coverages separately, but not all businesses are eligible to purchase this type of coverage. Generally, if a business has physical assets, it can benefit from the coverage offered by a BOP. Brick-and-mortar stores or business locations typically fit this description if the business is of a type that is eligible. In general, businesses that operate in low-risk sectors with a small commercial space have a good chance of qualifying to purchase a business owners policy. Typically, businesses with the following characteristics are eligible for a BOP, subject to the specific requirements of individual insurance companies.
The following are general characteristics typically required to purchase a BOP:
- Business operating in a low-risk industry
- Revenue below a certain threshold, generally from $1 to $5 million annually depending on the insurance company offering the policy
- Fewer than 100 employees
- Relatively small commercial property footprint
- Requires less than 12 months of business interruption insurance
In many cases, insurers will require a business to conduct all of its operations on-premises in order to obtain BOP coverage. Additionally, there may be restrictions related to business property in excess of a certain area. The types of businesses which are usually eligible to purchase BOPs include:
- Apartment building landlords
- Condo associations
- Grocery and convenience stores
- Office-based businesses
- Small- and mid-sized restaurants
Businesses operating in the following industries are typically not eligible to purchase BOPs due to their associated level of risk from an underwriting standpoint:
- Banks and financial firms
- Car dealerships.
- Auto repair shops
- Amusement parks
A BOP’s policy limits and endorsements will determine the extent of the coverage.
Generally, a BOP will cap its policy limits, making such policies most suitable for smaller businesses. The policy limit refers to the maximum amount the insurer will pay on a claim or for the length of the policy period.
BOP Coverage Specifics
As a policy that typically bundles several types of coverage together, a BOP offers more comprehensive coverage than a typical policy. The exact coverage such a policy offers typically varies, to some degree, from insurer to insurer.
As discussed earlier, business owners insurance policies typically feature the following three coverages, summarized here and outlined in more depth below.
- General liability coverage pays for expenses attributable to lawsuits against your business for property damage or bodily injury. Also covered are legal costs stemming from what are classified as advertising injuries, including copyright infringement and defamation. This insurance is often required for businesses leasing commercial space, those with a mortgage, and those which handle or work with expensive client property.
- Commercial property coverage pays for the cost of repairing or replacing business property in the event it is damaged, destroyed, or stolen. The coverage typically extends to commercial space owned by a business, supplies and equipment, along with product inventory. This type of coverage is typically aimed at businesses with assets that are at risk of burglaries, fires, and/or physical damage.
- Business interruption coverage pays for the costs of operating your business if it is disrupted by a covered event such as a disaster or accident. It may also cover the expenses of operating for a time at a temporary location.
Insurance for general liability is designed to cover costs stemming from lawsuits by people against your business due to claims of property damage or bodily injury. General liability insurance also covers legal costs linked to what are known as advertising injuries, which include copyright infringement and defamation. If your business leases commercial space, has a mortgage, or interacts with expensive client property, it may be required to maintain general liability insurance.
General liability insurance will pay for costs associated with defending a business against lawsuits that claim a person has suffered bodily injury as a result of interacting with the business’s property. Also included would be lawsuits claiming property damage or personal injury. These policies may also cover the costs of medical claims. To avoid the risk of a lawsuit eating into their profit, small business owners should maintain general liability insurance.
The general liability coverage of a BOP protects the business owner by covering legal liability stemming from damages caused to others. The covered damage must stem from injuries or losses caused by normal business operations that result in bodily harm or property damage caused by mistakes during installation, product defects, and errors when providing services.
A business that owns or leases valuable property, equipment or inventory will often purchase commercial property insurance to protect the building housing its operations along with other assets such as equipment and inventory. In many cases, businesses with such assets who are leasing commercial property, have a mortgage, or handle expensive client property are required to carry such coverage.
Commercial property coverage reimburses the insured for repairing or replacing business property that is damaged, destroyed or stolen. This extends to your commercial property, if you are the owner, as well as product inventory and supplies and equipment.
Generally, a business that has assets subject to physical damage or theft can benefit from commercial property insurance. This includes businesses that manufacture products, hold inventory and use and store equipment onsite. Coverage typically applies if your property or other assets are lost, vandalized, accidentally broken or damaged due to weather.
The property insurance coverage included in a BOP is typically designated as named-peril coverage, meaning that coverage is only provided for damage stemming from events that are specifically called out in the policy, such as wind damage, fire, flood, smoke vandalism, etc. BOPs that offer “open-peril” or “all-risk” coverage typically offer the option on a “special” policy form instead of the “standard” BOP policy agreement.
A BOP covers properties such as buildings, whether owned or rented, along with any additions to those buildings and outdoor fixtures. Additionally, the policy covers items owned by the business or items a third party owns but has placed in the custody of the business owner. Typically, the business property needs to be stored within a certain distance of the business premises.
Business Interruption (Loss of Income)
Business interruption insurance replaces lost income when a business is forced to cease or slow down operations temporarily after a covered loss such as vandalism, theft, or a natural disaster. This form of coverage is especially applicable to businesses with recurring expenses such as payroll or a mortgage. It helps reduce the chances that your business will lose employees or have a mortgage become subject to foreclosure if its revenue is disrupted for a time.
Business interruption insurance may additionally cover temporarily operating your business at another location if you are unable to conduct business at your main premises. During the pandemic, the Insurance Information Institute released an informational report designed to help policyholders explain what business interruption insurance covers.
What BOPs Typically Do Not Cover
A standard business owners policy is not intended to cover every hazard a business may face. As a result, there are a number of related coverage items that are usually purchased separately. Which of these coverages are offered will vary by insurance company, so it’s important to ascertain which extra coverages an insurer offers before purchasing a policy.
These coverages are typically not included in a standard BOP:
- Workers’ compensation: Most employers are legally obligated to provide workers’ compensation insurance, which offers coverage for injuries or illnesses suffered by employees connected to their work experience.
- Professional liability: Business and professionals seeking protection against lawsuits claiming negligence often turn to professional liability insurance.
- Commercial auto policy: This type of business car insurance protects you against accidents which occur when you are driving for business-related matters.
- Flood and earthquake insurance: In some cases, small businesses must also purchase policies specially designed to provide protection against damage stemming from floods or earthquakes.
- Employment practices liability: EPLI insurance protects your business against lawsuits claiming discrimination, for instance, related to gender or race-based claims.
- Employers liability insurance: While it sounds similar to employment practices liability, employers liability insurance covers costs arising from workplace injury lawsuits. This coverage is often included within a workers compensation policy.
Common Add-Ons (Endorsements) to BOPs
BOPs are flexible when it comes to adding coverages. In many cases, businesses will add-on coverages to their BOP to extend the risks they are protected from. The additional coverages are also known as endorsements and are typically designed to meet specific business needs that are not covered by a standard BOP.
BOP add-on coverages include:
- Data breach or cyber liability insurance: This coverage kicks in to help retail and other businesses recover their data if a breach should occur resulting in customer data such as social security or credit card numbers being exposed to theft or misuse.
- Hired and non-owned auto insurance (HNOA): HNOA coverage extends to vehicles, whether owned or leased, used occasionally by a business owner for business purposes such as inspections, client visits, etc.
- Liquor liability insurance: This coverage is utilized by bars and restaurants to protect them in cases where they serve alcohol to an inebriated individual who later causes harm to others or property damage.
- Professional liability insurance (also called errors and omissions insurance): This type of coverage provides protections for businesses against lawsuits due to disputes by customers over the quality of professional services that have been provided to them.
- Employee dishonesty insurance: This coverage applies to employee theft, whether by stealing from the till, forging checks, or other forms of dishonesty resulting in financial loss.
- Commercial umbrella insurance: For businesses serving large clients or in high-risk sectors, this type of coverage can be a helpful addition. It increases your general liability limit maximums, shielding your business from all but the most expensive lawsuits.
- Equipment breakdown coverage: For businesses that rely on certain equipment for the business to operate, equipment breakdown coverage provides important financial protection. In the event of equipment failure, the insurance company covers repair or replacement of the damaged equipment, lost income, and other related expenses.
Other coverages that businesses may want to add-on include:
- Crime insurance for certain crimes
- Spoilage of merchandise
- Fidelity bond
- Computer equipment
- Flood insurance
How a BOP Protects Your Business
If your business is covered by a BOP, it can pay for any legal fees associated with a lawsuit that falls under the terms of your contract. Additionally, it can cover repair or replacement of property that has been damaged or lost. The specific risks a business is subject to will vary depending on its particular circumstances and the industry within which it operates.
Restaurants are subject to a variety of risks ranging from injuries to cooking staff in the course of their normal work to slips and falls and foodborne illnesses, among others. The following examples demonstrate how a BOP can help protect restaurants against such hazards.
If a customer at your restaurant injures themselves on your property by slipping and falling, an ensuing lawsuit would be covered by the liability insurance portion of your BOP. If a passing storm damaged your building, the property insurance portion would kick in to pay for repairs. If a fire broke out in your kitchen and the restaurant had to close for repairs, business interruption insurance would pay for the lost income during that time.
Retail stores, like restaurants, face a wide variety of risks, including damage or theft of inventory, potential liability from accidents on their premises, and incidents which result in property damage.
For example, if a tornado damaged your storefront, commercial property coverage would pay for the repairs, while business disruption insurance would cover income lost while your store was closed for repairs. If a customer of your store fell due to an item left in an aisle by a store employee, and sued for the resulting medical expenses, your general liability coverage would be responsible for covering these costs.
Independent Contractor & Freelancers
If a freelancer’s equipment caused damage to an owned or leased property, for instance, by breaking loose and damaging a wall or fixtures, this would fall under commercial property insurance.
If a person visiting the freelancer’s place of business or using the freelancer’s equipment suffered an injury as a result, any resulting lawsuit would be covered by general liability.
If a freelancer specializing in equipment repair lost the use of their tools due to damage or theft, business interruption insurance would cover the lost income until either the equipment was repaired, or they acquired new equipment.
If you run your business at home, and a client comes by to discuss business matters but trips walking up the stairs and sues you, your liability coverage would handle the covered costs. If a criminal stole your computer, commercial property insurance would pay for a replacement. In the case of a fire, your business interruption coverage would pay for you to work at another location until your home office was ready to go or the coverage limit was reached.
The Pros & Cons of Business Owners Insurance
Business owners policies, as with any insurance product, have both benefits and drawbacks. As mentioned previously, they are most suitable for small and medium-sized businesses. Most larger businesses either won’t qualify to purchase a BOP or will find the coverage limits of a BOP insufficient for their needs.
Even among smaller businesses, a BOP may not be the right solution. Small businesses in high-risk industries generally don’t qualify for a BOP and, even if they did, might find the coverage limits to be too restrictive for their requirements. For small businesses that do qualify to purchase a BOP, there are a variety of pros and cons to consider. These include:
- Cost: A BOP is cheaper than purchasing individual policies for the main coverages such policies contain.
- Comprehensive: BOPs offer the potential to add endorsements covering the most common types of hazards businesses face.
- Simplicity: BOPs make it easier to manage your insurance needs by including multiple coverages under a single policy.
- Policy limitations: When compared to buying policies independently, BOPs are far less flexible, lacking the high degree of customization characteristic of stand-alone policies.
- Buyer restrictions: Policyholder restrictions prevent businesses in high-risk industries from purchasing them.
- Coverage limits: The total amount of risk covered per coverage and per policy are typically less than for other packaged products such as CPPs or if a coverage was purchased via an individual policy. Thus, these policies are less suitable for businesses with large footprints or a large amount of assets.
Business Owners Insurance Costs & Premiums
When considering any commercial insurance product, cost is going to be one of the most important factors. Purchasing the right insurance for your business is a tight balancing act between protecting the business from costly claims and keeping annual expenses low. As the number of lawsuits made against businesses grows, having BOP coverage is a smart choice, but business owners should not overpay for coverage they don’t need. In the section below, we review BOP costs and the key drivers affecting business owners insurance premiums.
How Much Does a Business Owners Policy Cost?
The exact price for a business owners policy will vary depending on the coverage included, policy limits, insurer, and the particulars of your business. However, most small businesses pay between $50 and $100 per month, or between $600 and $1,200 per year, for their BOP policies.
For example, Progressive reported that in 2020, small businesses paid $84 per month on average when purchasing a BOP through their Progressive Advantage Program. Similarly, Insureon reported that the average monthly cost of a BOP was $57, but ranged widely by industry.
Factors That Affect the Cost of BOPs
The cost to purchase a BOP will vary based on a variety of factors. These factors are based both on your company’s characteristics such as number of employees, revenue, etc., and the condition and extent of your company’s assets such as property, equipment and inventory.
- Business property value: The higher the value of your business property, the more expensive your premiums are likely to be. Businesses with very expensive property should be cautious when evaluating a BOP to make sure that its coverage limits are sufficient.
- Industry and business operations: While certain high-risk industries can’t purchase a BOP at all, businesses in medium risk industries are likely to find that the added risk exposure of their operations increases their premiums.
- Number of employees: Generally, the higher the employee count, the higher your premiums will be.
- Business location and size: If your business is located in an area prone to natural disasters or has an above average crime rate, your premiums will likely be higher.
- Claims history: As is the case with nearly all insurance products, a business that has an extensive claims history will pay more for their BOP. Insurance companies view past performance as a strong indicator of future risk.
Finding the Best Business Owners Insurance
Business owners policies have evolved over the years to offer improvements and address issues related to changing economic conditions. In addition to adding features to the three core coverages (general liability, commercial property, business interruption), BOPs have gradually added further endorsement options, enabling business owners to benefit from managing all or a large portion of their insurance coverage with a single policy.
Comparing BOP Insurers
When comparing BOP insurers, there are a number of factors to consider other than just price. While price is an important component of selecting a BOP, coverage options and policy limits, premiums and deductibles, claims reporting, financial strength, and insurer reputation are also important considerations.
Coverage Options & Policy Limits
Depending on your business’s unique needs, the endorsements offered as coverage options can play an important part in selecting between policies. While the main coverages offered by BOPs are usually the same, available endorsements can diverge widely. As a result, carefully researching these offerings is important to choosing the policy that is best for your business.
Policy limits are also vital to choosing the BOP that is right for you. Because of this, for some business owners, it may be worth it to pay a somewhat higher premium to gain access to higher coverage limits.
Premiums & Deductibles
The premiums you pay for a BOP policy depend on a variety of factors, including business size, property footprint, number of employees, claim history, etc. In addition to the premiums charged to purchase a policy, it’s important to find out what the deductible will be. Generally, higher deductibles will accompany lower premiums and vice versa.
Insurers can differ widely in their policies for claims reporting. The most responsive insurers will make it easy for you to report a loss and get back to you quickly after you have made a claim. This includes dispatching a claims adjuster to your place of business as quickly as possible.
The features offered in a BOP are only part of the story when selecting the policy that is right for you. An insurer’s financial strength should also be a consideration when making your decision. An insurer with a robust balance sheet should be able to meet all of its claims even if faced with a significant upsurge in claims.
Most large insurance companies have sufficient financial resources to reliably pay claims, but if you are considering a smaller niche carrier, it’s worth looking at their financial strength ratings from credit ratings agencies like A.M. Best, Moody’s, or Standard & Poor’s. These organizations evaluate different insurers’ financials and histories of paying claims to issue ratings that can be used by the public.
Besides policy coverages, endorsement options and financial strength, an insurer’s reputation with its customers is also an important factor to take into account when selecting a company. Ideally, the insurer you select will have a reputation for good customer service, a reasonable response time to claims, and will pay claims in a timely manner without unduly disputing legitimate claims. Resources like J.D. Power and the Better Business Bureau can provide helpful insight into how well insurance carriers engage with their customers.
Best Business Owners Insurance Companies Overall
Next (Best BOP Insurance Overall)
Next Insurance is a specialized business insurer that operates completely online.
- Convenience of 100% online insurer offering service around the clock
- Instant quotes within 5 minutes
- Reduced overhead enabling highly competitive premiums
- Prorated refunds with no cancellation fee
- Pay premiums online in monthly installments without any additional fee
- No general liability coverage in 10% of states
- Claims are processed by a third party, which can lengthen the claims process
Next Insurance is an insurer for the digital age, providing its customers—mainly small businesses—the convenience of doing all their business with the company online. The reduced expenses associated with this method of operation allow Next to offer a number of attractive features including prorated returns with no cancellation fees, monthly online premium payments, instant digital quotes, free additional insureds, and instant digital certificates of insurance.
While the company sells approximately 90% of its policies online with no underwriter or agent using its proprietary insurance technology, Next insurance agents are available to speak on the phone if needed. This could be helpful in the event you need to build a more tailored policy for your specific needs, which Next allows customers to do. Unlike some of its competitors, Next allows customers to add additional types of coverage to its business owners policies outside of the standard commercial property and general liability components. Some common add-ons include workers’ compensation insurance and commercial auto insurance.
Despite being founded recently in 2015, Next has developed a solid reputation in the industry. The company has an A- (Excellent) rating from A.M. Best for financial strength, and secured an A rating by the Better Business Bureau.
Because of Next’s combination of attractively priced policies, convenient online operations, and its highly responsive customer service, we have ranked the insurer as offering the Best Business Owners Policy Overall.
Progressive (Best for Coverage Extensions & Package Discounts)
Progressive has grown from its original mission to offer budget auto insurance at its inception in 1937 to providing a full range of business insurance policies.
- Fast, accurate quotes provide you with the information you need without delay
- BOPs qualify customers for up to a 15% package discount on commercial auto insurance
- Some of Progressive’s commercial policies are underwritten by third parties
- No coverage in Hawaii
Progressive’s BOP includes the standard general liability and property protection coverage you would expect. It also includes business personal property, loss of income, and pollution cleanup coverage. Its policies are very reasonably priced when compared to other insurers. The typical monthly cost for small businesses obtaining BOP coverage through Progressive is just under $70.
Progressive offers its business owners policies through the Progressive Advantage Business Program—a product designed to give small business owners access to all of the commercial insurance coverage they need even if that coverage isn’t specifically underwritten by Progressive. These additional coverage options include professional liability, contractors liability, cyber insurance, and more.
In addition to convenience, one of the key benefits of shopping for your BOP through the Advantage Business Program is that you will qualify for package discounts on other Progressive products. For example, businesses that carry a BOP will receive up to 15% off Progressive commercial auto insurance. Another key benefit is having access to Progressive’s in-house team of commercial insurance experts.
Progressive is rated A+ (superior) for financial strength by A.M. Best. Moody’s rates it a solid AA, and Standard & Poor’s gives it an AA rating, both scores indicating that the insurer is in good shape financially.
Because of the broad range of coverages and the discounts Progressive offers, we rated it as having the Best BOP for Coverage Extensions & Package Discounts.
State Farm (Best for Customer Satisfaction)
Founded in 1922, State Farm offers property, casualty, and auto insurance throughout the U.S through its extensive agent network.
- Each agent is a business owner themselves, giving them a firsthand understanding of what it takes to run a business
- State Farm is known for providing excellent customer service
- Must speak with an agent to get a quote
- Options for accessing policy information online are limited
State Farm’s BOP offerings cover over 300+ professions, and include general liability, property, loss of income, equipment breakdown, and professional liability coverage. For businesses that need additional protection, State Farm also offers a variety of endorsements including commercial auto, workers’ comp, and a commercial liability umbrella policy (CLUP) that provides additional coverage in cases where liability losses exceed the BOP policy limits. These options will generally serve the needs for most small businesses.
While its BOP policy offerings are comparable to other insurers in this guide, where State Farm stands out is in offering top notch customer service through its nationwide network of agents. These agents run their own businesses, giving them extra incentive to offer truly superior service. As a result, it’s no surprise that State Farm has an A+ rating from the Better Business Bureau and scores well on financial stability. State Farm is rated A++ (Superior) by A.M. Best, AA1 by Moody’s, and AA by Standard & Poor’s.
Due to its strong policies and history of offering superior service that extends back decades, we rated State Farm as offering the Best BOP for Customer Satisfaction.
Chubb (Best Coverage Options)
Chubb’s BOP offers a broad range of property and liability insurance coverage, establishing a foundation to protect small businesses from the most common risks they face.
- Broad coverage limits: Chubb offers BOPs to businesses with up to $30 million in revenue in a wide variety of industries
- Superior claims handling, financial strength, and customer service
- Basic policy does not include business interruption coverage, but can be added
- Prices tend to be higher than competing insurers
- Quotes cannot be obtained online
Chubb’s business owners policies provide coverage tailored to meet the needs of small businesses across a range of sectors. The policies are designed to handle the risks associated with specific industries and offer a variety of features for property and liability insurance.
Unlike certain other insurers, Chubb allows customers to add a number of coverage enhancements to its standard BOP. These additional coverage options include privacy and data breach, employment practices liability, equipment breakdown, professional liability, and more. For most small businesses, Chubb will be able to include all of the necessary insurance products in a single policy.
Some key features of Chubb’s BOPs include a dedicated underwriting team that provides support to all standard and financial lines products, paperless PDF quote proposals, and policies that are generated instantly.
While Chubb’s policies can be more expensive than competitors, Chubb is the largest commercial insurer in the U.S., and is highly regarded by its customers and the financial rating agencies. J.D. Power’s most recent customer satisfaction study gave Chubb an 838 out of 1,000, the second-highest score of the companies rated in the guide. Chubb has also earned A.M. Best’s top rating of an A++, Standard & Poor’s third-highest rating of AA, and Moody’s fourth-highest rating of Aa3.
With its comprehensive coverage across multiple industries, Chubb is a great choice for companies with higher levels of insurance needs than the typical small business. As a result, Chubb is our choice as having the BOP with the Best Coverage Options.
The Hartford (Runner-Up)
The Hartford provides insurance to small businesses in a number of industries and has been in existence as an insurer for over 200 years.
- Highly customizable policies accommodate a business’s unique requirements
- Broad industry coverage
- Slightly below-average customer satisfaction in a recent poll
- No coverage in Alaska, Michigan, Hawaii, or New Jersey
Business owners policies offered by The Hartford feature a high degree of customization, enabling purchasers to design a policy which best fits their business needs. The Hartford representatives are trained to help buyers select options based on business size, industry, and risk exposure. Popular add-on coverages to the standard BOP include cyber liability insurance, professional liability (errors and omissions) coverage, and workers’ compensation insurance. The Hartford’s wide range of business insurance products make it a good choice for business owners who want to purchase all their insurance from a single carrier.
One aspect of The Hartford’s performance that is subpar is its scores on a recent customer satisfaction study. According to J.D. Power, The Hartford scored an 803 out of 1,000 in its most recent small business insurance study. This number came in under the category average of 829. That being said, The Hartford’s rating with the Better Business Bureau is excellent (A+), and its financial strength scores from Moody’s, A.M. Best, and S&P demonstrate The Hartford’s consistently reliable performance and financial stability.
A combination of highly customizable coverage options and strong financials make the Hartford a Runner-Up pick for business owners policies.
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