What Is Business Owners Insurance?

If you run a small or mid sized business, you already know there is a lot that can go wrong.

A customer slips and gets hurt.
A pipe bursts and ruins your office.
A fire shuts you down for months.
A lawsuit shows up when you least expect it.

You probably do not have time to become an insurance expert. You just want one solid policy that covers the big stuff and does not break your budget.

That is where business owners insurance comes in.

Most of the time, when people say “business owners insurance,” they are talking about a Business Owner’s Policy, usually shortened to BOP. A BOP is a bundle that combines several key coverages into one package: property insurance, general liability insurance and business interruption coverage, usually at a lower cost than buying them one by one.

For a virtual brokerage like Savon Insurance Brokerage and their clients at savonusa.com, a BOP is often the starting point for protecting a “Main Street” business. It is designed to be simple to buy, easier to understand and flexible enough to adjust as you grow.

In this long guide, we will break down business owners insurance in plain English so you can see:

• What a Business Owner’s Policy actually is
• What it typically covers
• Who qualifies and who does not
• What it does not cover (which is just as important)
• How much you might need
• Why so many small businesses are still underinsured
• How Savon Insurance Brokerage can help you build the right protection

Think of this as the conversation you would have with a smart friend who works in insurance, not a wall of fine print.

 

The Big Picture: Why Business Owners Insurance Exists

Before we get into technical definitions, it helps to zoom out.

Most small businesses face the same core problems:

• You have limited cash reserves.
• One big loss can knock you out or set you back for years.
• You do not have time to manage ten separate insurance policies.

At the same time, you usually need several types of protection:

• Coverage if someone sues your business
• Coverage for the building or space you work in
• Coverage for your equipment, inventory and furniture
• Coverage if you cannot open for a while after a fire or other disaster

If you tried to piece all of that together one policy at a time, you would:

• Spend more money
• Spend more time on admin
• Probably still have gaps

Insurance companies know this, which is why they created the Business Owner’s Policy.

A BOP takes the most common coverages a smaller business needs and wraps them into one policy. Because it is bundled and targeted at low to moderate risk businesses, it is usually more cost effective than buying each coverage separately.

In other words: business owners insurance exists to give you broad, practical protection for your everyday risks, without asking you to become a full time insurance manager.

 

What Is A Business Owner’s Policy (BOP)?

Let us get clear on the basic definition.

Industry sources describe a Business Owner’s Policy as a package policy that provides both commercial property and liability coverage for eligible small and medium sized businesses.

A simple way to say it:

A BOP is one policy that usually includes:

• General liability insurance
• Commercial property insurance
• Business interruption insurance
  Plus the option to add other coverages you might need.

Bundled coverage in one place

Instead of three or four separate policies with different paperwork and billing, you get:

• A single declarations page
• One set of core conditions
• One renewal date
• A cleaner picture of what is covered and what is not

Most BOPs are built on standard forms from ISO (Insurance Services Office) or similar frameworks. These forms are designed to be self contained policies that package broad property and liability coverage, with the option to add endorsements for extra protection.

For a business owner, this usually means:

• Less confusion about who covers what
• Fewer surprises when a claim happens
• A simpler conversation with your broker

How a BOP differs from buying coverages separately

You could buy:

• A stand alone general liability policy
• A separate property policy
• A stand alone business income policy

In some cases, that is the right move, especially for larger or higher risk companies.

But for many small businesses, a BOP:

• Is cheaper overall, because carriers discount bundles and streamline underwriting
• Is easier to qualify for, as long as you fit standard eligibility rules
• Gives you consistent limits and conditions across the main types of coverage

Think of a BOP like a solid “base package” that you can then customize with add-ons. Savon Insurance Brokerage’s role is to help you decide which custom pieces you actually need, instead of just taking a generic off the shelf bundle.

 

What Does Business Owners Insurance Typically Cover?

Coverage can vary by insurer and state, but almost all Business Owner’s Policies share three main parts:

1. General liability insurance
2. Commercial property insurance
3. Business interruption (also called business income) insurance

On top of that, you can often add extra coverages, such as cyber or equipment breakdown, using endorsements.

Let’s break each part down in everyday terms.

General liability: protecting you from everyday lawsuits

General liability insurance is usually the first liability policy any business buys. It protects you against many of the common claims that can hit almost any type of business.

In a BOP, general liability coverage typically includes:

• Bodily injury
  For example, a customer slips on a wet floor in your shop, breaks an arm, and sues you.
• Property damage
  Your employee accidentally damages a client’s property while working at their location.
• Personal and advertising injury
  Claims related to things like libel, slander, or certain kinds of advertising disputes.

If you lose or settle a covered claim, general liability can pay:

• Legal defence costs
• Settlements or judgments (up to your policy limits)
• Some related expenses, depending on the policy terms

Without this part of a BOP, a single lawsuit could drain your cash or force you to borrow heavily just to stay open.

Commercial property: protecting your space and stuff

The property section of a BOP protects your:

• Building, if you own it
• Improvements you have made to a rented space
• Business personal property, such as equipment, inventory, furniture and fixtures

It covers certain kinds of damage from causes listed in the policy, such as fire, some types of water damage, theft, vandalism and other named or “special” causes of loss, depending on the form.

For example:

• A fire in your restaurant damages the kitchen, furniture and inventory.
• A break in at your office results in stolen computers and broken windows.
• A storm blows debris through your storefront, ruining your display and inventory.

Property coverage in a BOP helps pay to repair or replace what was damaged, up to your chosen limits and subject to deductibles and exclusions.

Without it, you are left paying for those repairs out of pocket, on top of lost income while you are closed.

Business interruption: covering lost income when you have to shut down

This part is often overlooked, but it can be a lifesaver.

Business interruption insurance, sometimes called business income coverage, helps replace lost income and cover ongoing expenses if you have to close or reduce operations due to a covered property loss.

Picture this:

• A fire forces you to close your shop for three months.
• Property coverage helps pay to repair the building and replace inventory.
• Business interruption coverage can help pay:
  • Lost profits based on your historical earnings
  • Ongoing expenses like rent, certain payroll and utilities

Without this, a disaster can put you in a double squeeze: no income, plus the same bills you had before.

Regulators note that business interruption coverage is typically bundled in a BOP and that it is estimated only about 30–40 percent of small businesses carry it.

That means the majority of small businesses are relying on savings and loans to survive a shutdown. A BOP is one way to avoid that risky position.

Extra coverages and endorsements

Modern BOPs can often be customized with additional coverages, for an extra premium. Examples from various carriers and guides include:

• Equipment breakdown
  Helps if important equipment fails due to a covered breakdown.
• Data breach or cyber liability
  Helps if you are hit by a cyber attack or data breach.
• Professional liability (in some packages)
  Limited protection for service errors, though often sold as a separate policy.
• Business income from dependent properties
  Helps if a key supplier or location you depend on has a covered loss.
• Utility services coverage
  Helps if loss of power or water from outside your premises shuts you down.

Savon Insurance Brokerage can help you look at these options and decide which ones make sense for your type of business, instead of just blindly checking boxes.

 

Who Is Business Owners Insurance Designed For?

A Business Owner’s Policy is not for every company. It is mainly built for small and medium sized businesses that meet certain eligibility criteria.

Typical eligibility rules

Different insurers set their own rules, but many sources agree on some common guidelines. A BOP typically targets businesses that:

• Have fewer than 100 employees
• Have annual revenue under 1 million to 5 million dollars, depending on carrier
• Occupy a relatively small commercial space
• Operate in a lower risk industry
• Do most of their work on premises, not at high risk job sites

Regulators and education resources also note that BOPs are widely used for “Main Street” businesses and that companies with around 100 or fewer employees and revenue up to about 5 million dollars are typical candidates.

Types of businesses that often qualify

Common examples include:

• Retail shops and boutiques
• Coffee shops and small restaurants
• Professional offices (accountants, consultants, designers, real estate offices)
• Small medical or dental practices
• Salons, barbers and small personal services
• Small wholesalers or distributors
• Small apartment or mixed use buildings in some cases

If you picture a typical local storefront or small office, that is the sweet spot.

Who usually does not qualify for a BOP?

High risk or larger operations usually need more customized coverage. For example:

• Manufacturers with heavy equipment
• Large construction firms and contractors with major job sites
• Companies with more than 100 employees or revenue well above 5 million
• Businesses with multiple large locations or significant custom risks

Those businesses usually move into a commercial package policy that is tailored to their specific exposures, rather than a standard BOP.

Savon can help you figure out which side you are on. Some companies sit right on the line, and it might be possible to start with a BOP and move to a custom package as you grow.

 

What Business Owners Insurance Does NOT Cover

This part is just as important as the coverage list.

A BOP is broad, but it does not cover everything. Knowing what is not included helps you see where you may need extra policies.

Common examples of what is not usually covered by a standard BOP include:

• Workers’ compensation
  Coverage for employees who are injured or get sick because of their job. This is almost always a separate policy.
• Commercial auto
  Vehicles used for business usually need their own commercial auto policy.
• Professional liability (errors and omissions)
  Claims that arise from professional advice or services, like mistakes in your work. Often sold as a separate E&O policy.
• Directors and officers (D&O) liability
  Claims against company leadership for management decisions.
• Cyber liability (unless added)
  Many standard BOPs do not include full cyber coverage unless you add it.
• Flood damage to buildings or contents
  Flood (rising water from outside) is usually excluded from standard property coverage and may require a separate flood policy.
• Intentional acts and illegal activities
  No policy covers deliberate harm or criminal acts.

Your BOP will also have:

• Dollar limits
• Deductibles
• Specific exclusions for certain causes of loss

This is where an independent broker earns their keep: by helping you look at the exclusions in your BOP and deciding which extra policies you need, so you do not assume you are covered for something that is actually excluded.

 

Business Owners Insurance vs General Liability Only

Sometimes people say, “I just bought general liability for my business. Isn’t that enough?”

Usually not.

A recent comparison from one online broker points out that while both a stand alone general liability policy and a BOP offer basic liability protection, only a BOP includes property and business interruption by default.

Here is how they differ:

• General liability only
  • Helps if you are sued for bodily injury, property damage, or personal and advertising injury
  • Does not cover your building, equipment or inventory
  • Does not pay your lost income if a fire shuts you down
• Business Owner’s Policy
  • Includes general liability
  • Includes commercial property coverage
  • Includes business interruption income coverage in most cases

If you run a service business with almost no physical assets and you always work at client locations, general liability only might be a minimal starting point. But for most businesses with a physical space, inventory or equipment, a BOP is usually a much more sensible core policy.

 

Business Owners Insurance vs A Commercial Package Policy

Another common question is how a BOP compares with a commercial package policy (CPP).

Think of it this way:

• A BOP is like a pre built combo meal. It works very well for many smaller, lower risk businesses and is usually cheaper and simpler.
• A commercial package policy is more like ordering a la carte. You combine the exact coverages you need, which is better for larger or more complex risks, but usually comes at a higher price and complexity.

ISO’s overview of the Businessowners Program explains that the BOP was created to give smaller businesses a package similar to a full commercial package policy, but in a simpler, self contained form.

Reasons you might move to a CPP instead of a BOP include:

• Your revenue grows past typical BOP limits
• Your operations become riskier
• You need more specialized or higher limit coverages
• You have multiple locations with different needs

Savon can help you know when it is time to move from “combo meal” to “custom order.” Many businesses start on a BOP and graduate to a package as they grow.

 

Real World Examples: How A BOP Can Help

Let us make this more concrete with a few simple scenarios.

Scenario 1: The coffee shop fire

You own a small coffee shop in a rented space. One night, an electrical fire starts in the kitchen and spreads.

A BOP can help:

• Property coverage
  Pays to repair your fixtures, replace equipment and inventory.
• Business interruption coverage
  Helps replace lost income while you are closed and still paying rent and some staff costs.
• Liability coverage
  Protects you if a neighbouring tenant or landlord claims your fire caused damage to their property.

Without a BOP, you might have general liability only, which would not pay to rebuild your shop or cover your lost income.

Scenario 2: The client slip and fall

You run a small consulting firm out of an office.

A client visits, trips over a loose rug, and fractures a wrist. They sue for medical bills and lost work time.

A BOP’s liability section helps pay:

• Legal defence costs
• Settlements or judgments, if you are found liable

You do not have to liquidate savings or take out emergency loans just to deal with an accident.

Scenario 3: The retail theft and vandalism

You own a small clothing store. Overnight, someone breaks in, smashes display windows and steals inventory.

A BOP’s property coverage can:

• Pay to replace stolen goods
• Pay to fix broken windows and damaged fixtures

If your store has to close for repairs, business interruption coverage can help with lost income.

These scenarios sound simple, but they are exactly the kinds of events that cause many small businesses to struggle or close if they do not have the right coverage.

 

Why So Many Small Businesses Are Still Underinsured

Here is the surprising part.

Even though business owners insurance exists, and BOPs are made to be simple, most small businesses still do not have enough protection.

The 2025 Hiscox Underinsurance in Small Business Report found that 77 percent of small businesses in the United States are underinsured, up from 75 percent in 2023.

Other research from NEXT Insurance shows that while about 92 percent of small business owners say they have some form of business insurance, only 13 percent feel fully prepared for risks, and around 90 percent are not confident they have enough coverage.

Why is that?

Common reasons include:

• Confusion about what policies actually cover
• Thinking “any coverage is better than none” and stopping there
• Waiting to buy insurance until after the business is profitable
• Never reviewing coverage as the business grows

Hiscox notes that many owners see insurance as a “set it and forget it” purchase, and a third have not reviewed policies in the last three years, even though their revenue and risk levels have changed.

The result is a lot of businesses that:

• Have some coverage, but not enough
• Have coverage that no longer matches their size or operations
• Would still be in serious trouble after a major loss

Business owners insurance, especially a BOP, is not magic. It has to be set up correctly, in the right amounts, and reviewed as you grow. That is where a broker like Savon can make a very real difference.

 

How Much Business Owners Insurance Do You Need?

There is no one perfect number, but you can get to a reasonable range if you think through a few questions.

1. What would it cost to replace your stuff and your space?

Start with property:

• If you own your building, what would it cost to rebuild, not just what you could sell it for?
• If you rent, what improvements have you made inside the space that you would need to replace?
• How much would it cost to replace your equipment, inventory, furniture and fixtures?

Property coverage limits should be high enough to handle a serious event, not just a minor one. Underinsuring to save a little on premiums can backfire badly if you suffer a near total loss.

2. How much income would you lose if you had to shut down?

Think about business interruption:

• If a fire or major event closed your doors for three to six months, how much income would you lose?
• What fixed expenses would still keep coming due? Rent, utilities, some payroll?

Many BOPs tie business income coverage to your actual earnings and may have a maximum period of indemnity (for example up to 12 months). You want to be sure the policy terms match how long it would realistically take you to rebuild and reopen.

3. What liability limit makes sense for your risk?

Liability claims can be large. You want a general liability limit that reflects:

• The number of customers or visitors you have
• The kind of work you do
• The potential for serious injury or property damage

Common starting points for small businesses include 1 million dollars per occurrence and 2 million dollars aggregate, but some need higher limits, especially if they sign contracts that require it.

In some cases, businesses buy an additional umbrella or excess liability policy on top of their BOP if they need higher total protection.

4. Are there contracts or leases that set minimum requirements?

Always look at:

• Lease agreements
• Client contracts
• Vendor contracts

Many of these documents specify minimum coverage types and limits. Your BOP should at least meet those requirements. If it does not, you could be in breach of contract even if you think you are covered.

Savon can help you review these documents and line up your BOP limits with what your partners and landlords expect.

 

What Affects The Cost Of Business Owners Insurance?

Rates vary widely, but most insurers look at similar factors when pricing a BOP.

Key elements include:

• Your industry
  Restaurants and retail shops have different risks than consulting firms or accountants.
• Your location
  High crime areas, regions prone to severe weather, or cities with high lawsuit rates can mean higher premiums.
• Your revenue and payroll
  Higher revenue and more employees can mean more exposure and larger potential claims.
• Your building and contents value
  The more you have to protect, the more coverage you need, which affects the price.
• Construction and safety features
  Fire alarms, sprinklers and strong construction can help lower property risk.
• Claims history
  Frequent or severe past claims can push your rate up, while a clean record can help keep costs down.
• Coverage limits and deductibles
  Higher limits cost more. Higher deductibles usually lower your premium but increase your share of each loss.

A BOP is designed to be cost effective, but it is not one flat price for everyone. That is good news, because it means your real risk and efforts to manage it are recognized.

 

How To Build The Right Business Owners Insurance Plan With Savon

Having the right coverage is not about turning on a switch. It is about making a few good decisions in the right order.

Here is how working with Savon Insurance Brokerage can help.

Savon presents itself as a virtual insurance brokerage that lets you get quotes online and connect with licensed advisors who shop multiple carriers on your behalf.

Step 1: Understand your business profile

Savon can start by asking basic but important questions:

• What do you do?
• Where do you work?
• How many employees do you have?
• What equipment, inventory and property do you own?
• Who are your clients and how do they interact with you?

This helps place you in the right class of business and identify whether you are likely to qualify for a BOP.

Step 2: Map your core risks

Next, they can help you map risks in simple categories:

• People getting hurt on your premises
• Damage to your building or space
• Damage or theft of your equipment and inventory
• Lost income if you have to shut down
• Extra risks like cyber, professional services or commercial vehicles

This is where you see clearly what a BOP can handle and where you might need additional policies.

Step 3: Compare BOP options across insurers

Because Savon works with multiple carriers, they can:

• Get quotes from different insurers for similar BOP structures
• Compare limits, deductibles and included extras side by side
• Explain why one option is cheaper or more expensive than another

You can then choose based on value, not just on the lowest number.

Step 4: Fill gaps with extra coverages if needed

If they see gaps, Savon can suggest:

• Workers’ compensation
• Commercial auto
• Professional liability
• Cyber liability
• Umbrella liability

All layered on top of your BOP, so you are not doubling up or missing critical areas.

Step 5: Review regularly as you grow

Remember those underinsurance stats: 77 percent of small businesses underinsured, and only 13 percent feeling fully prepared for risk.

One way to avoid joining that group is to have a broker review your coverage every year or two, and especially after big changes like:

• Opening a second location
• Adding a new line of business
• Taking on much larger contracts
• Doubling your staff or revenue

Savon can adjust your BOP and related policies as you grow, so your protection keeps pace with your business.

 

Questions To Ask When You Review Or Shop For Business Owners Insurance

You do not need to know every technical term. But asking good questions will help your broker build the right plan.

Here are some to keep in your back pocket:

1. What does this BOP actually cover in my case?
   Ask for examples tied to your business, not just generic ones.
2. What are the main exclusions I should know about?
   Focus on what is not covered that might matter to you, like flood, cyber or professional errors.
3. How much business interruption coverage is included, and for how long?
   Confirm whether it would realistically cover you long enough to get back on your feet.
4. Are my property limits high enough to rebuild and replace everything?
   Do not just insure for what you paid years ago.
5. Does this policy meet the insurance requirements in my leases and contracts?
   You want to be in compliance from day one.
6. What discounts or credits are available if I improve safety or security?
   For example, alarms, sprinklers or other risk mitigation steps.
7. If my business grows, how will we adjust this policy?
   Make sure there is a plan for review, not a “set it and forget it” approach.

Any broker should be happy to answer these. If you feel rushed or brushed off, that is a red flag.

 

Frequently Asked Questions About Business Owners Insurance

What is business owners insurance in simple terms?

Business owners insurance usually refers to a Business Owner’s Policy (BOP), which bundles:

• General liability insurance
• Commercial property insurance
• Business interruption coverage

into one policy for small and mid sized businesses.

Who should consider a BOP?

Any small or mid sized business with a physical location, equipment or inventory should at least look at a BOP. Typical candidates have fewer than 100 employees, less than 5 million dollars in revenue, and operate in lower risk industries like retail, offices, small restaurants and similar trades.

Is a BOP required by law?

A BOP itself is not usually required by law, but:

• Landlords often require certain property and liability limits
• Clients may require liability coverage in contracts
• Banks may require coverage as a condition of loans or lines of credit

A BOP is often the easiest way to meet those requirements.

How is a BOP different from general liability insurance?

General liability covers many kinds of lawsuits but does not cover your building, equipment, inventory, or lost income if a disaster shuts you down. A BOP includes general liability and adds property and business interruption coverage in one policy.

Does business owners insurance cover employees’ injuries?

No. Employee injuries and work related illnesses are usually covered by workers’ compensation, which is a separate policy from your BOP.

How much does a BOP cost?

Cost depends on:

• Your industry
• Location
• Revenue and payroll
• Property values
• Claims history
• Coverage limits and deductibles

Because it bundles multiple coverages, a BOP is often cheaper than buying them separately, but there is no single flat price.

How often should I review my business owners insurance?

At least once a year, and any time your business:

• Adds a location
• Changes services
• Takes on major new contracts
• Sees big changes in revenue or staff

Surveys show that many small businesses do not review their insurance for years and end up underinsured. Regular reviews with a broker are one of the easiest ways to avoid that.

 

Final Thoughts: One Policy, A Lot Of Protection

Business owners insurance is not just a line on a form. It is one of the main safety nets between your business and a real disaster.

A Business Owner’s Policy gives you:

• Liability protection if someone sues you
• Property coverage for your space and contents
• Business interruption coverage if a covered loss shuts you down
• The option to add extra protections that fit your world

It is not meant to cover everything, and it does not replace other policies like workers’ comp, commercial auto or professional liability. But it is the core of a sensible insurance plan for many smaller businesses.

You do not need to become an insurance expert to get this right. You just need:

• A clear picture of your risks
• Honest answers to a few big questions
• A broker who will explain your options in plain language

That is exactly where Savon Insurance Brokerage comes in. As a virtual, independent brokerage, Savon can compare offers from multiple carriers, help you understand what a BOP can do for your business, and then build a plan that matches your size, your budget and your goals.

Your business already has enough moving parts.
Your insurance does not have to be one more thing you worry about alone.