Businessowners Policy
Purpose and eligibility
The Businessowners Policy is a simplified package for small, low-hazard businesses such as apartments, offices, retail, service and processing risks that fall within eligibility rules on building size, gross sales and occupancy. It combines property and liability in one policy, uses no coinsurance, and is written in a streamlined format.
Property coverage
Building and business personal property, generally on a special (open-peril) basis with replacement cost valuation, plus business income and extra expense for up to 12 months after a covered loss. Optional coverages include crime, equipment breakdown, outdoor signs and employee dishonesty.
Liability coverage
Bodily injury, property damage, personal and advertising injury, and medical expenses. Limits are usually lower and simpler than a full CGL.
Exclusions and gaps
No commercial auto, no workers compensation, no professional liability, no pollution, no employment-related practices, and no aircraft or watercraft liability. Business income does not extend indefinitely - a longer period requires endorsement. Money, vehicles, accounts and valuable records are limited or excluded.
Traps
A BOP is not a CPP and cannot simply add a commercial auto coverage part. Not every small business is eligible - a bar with live entertainment or a large manufacturer typically is not. The 12-month business income period is a common wrong-answer point.
Rule of thumb
When a question describes a small office or retail shop that needs property, business income and liability in one contract with no coinsurance calculations, the answer is the BOP.