Business insurance insights
Business Owners Policy: How to Review a BOP Proposal
A business owners policy packages property, business income and liability cover. This checklist compares a proposal with ISO's standard program section by section and lists what a BOP usually leaves out.
A business owners policy (BOP) is "a 'package' product that typically includes property, business interruption/continuation and liability insurance," according to the National Association of Insurance Commissioners (NAIC small business guide). To review a BOP proposal, check four things: whether your business is eligible, how property is valued, when business income cover starts and stops, and the liability limits. Then list what the package leaves out.
This post is a review checklist. For what a BOP covers in full, read our business owners policy coverage page. To set two or more proposals side by side, use the quote comparison worksheet.
Check eligibility first
BOPs are built for smaller businesses, and insurers set limits on who qualifies. The California Department of Insurance says a BOP "is written with strict underwriting guidelines including maximum allowable square footage" and suits "main street" businesses such as hardware stores, barbershops and accountant offices (CDI commercial insurance guide). The NAIC adds that "not all businesses qualify," giving a factory or a jewelry store as examples that usually need more customized coverage.
Insurance Services Office (ISO) publishes a standard BOP program, and its eligibility rules give a sense of scale (ISO Businessowners Policy program overview, dated February 11, 2025):
- For most eligible risks, 35,000 square feet of total floor area and $6,000,000 in annual gross sales at each location.
- Contractors: payroll must not exceed $300,000 a year, with further limits on the work.
- Restaurants: 7,500 square feet or less, with seating limits that vary by restaurant type.
An insurer's own rules can differ. Ask the agent which eligibility rules applied to your proposal and whether anything about your business is close to a limit.
Compare each section with the ISO benchmark
The ISO program is one reference point, not a description of every BOP. Use it to spot where a proposal differs, then ask why.
| Section | ISO standard program | What to ask about your proposal |
|---|---|---|
| Property valuation | Replacement cost without deduction for depreciation, with an 80% insurance-to-value requirement that an endorsement can waive; an actual cash value option for buildings | Is it replacement cost or actual cash value? Is there a coinsurance or insurance-to-value condition? |
| Property deductible | $500 base, with options from $250 to $10,000; windstorm or hail percentage deductibles of 1%, 2% or 5% | Which deductible applies, and is there a separate wind or hail deductible? |
| Business income | Actual loss of income during restoration, within 12 consecutive months of the damage; extended business income for up to 60 days after reopening; a 72-hour time period deductible that an endorsement can reduce to zero | How long is the period, and how many hours pass before cover starts? |
| Civil authority | Income cover if authorities block access because of nearby damage, beginning 72 hours after the order | Does the proposal include it, and with what waiting period? |
| Liability limit | $300,000 per occurrence basic limit, which can be raised to $500,000, $1,000,000 or $2,000,000; an aggregate of twice the occurrence limit; a separate products-completed operations aggregate | Does the limit match your contracts and lease? |
| Defense costs | Paid outside the limits of insurance | Are defense costs inside or outside the limit? |
| Damage to rented premises | $50,000, with higher limits available | Does your lease ask for more? |
| Small built-in limits | Electronic data $10,000 aggregate; interruption of computer operations $10,000; fungi, wet rot or dry rot $15,000 | Are these enough for your records and systems? |
If your property limit is low compared with the value of the building or contents, read our coinsurance questions post before you accept it.
List what the BOP leaves out
The NAIC says a BOP "typically does not include commercial auto insurance, workers' compensation, health or disability insurance or liability insurance for claims of wrongful professional practices." Check each one separately:
- Vehicles used for work: see the commercial auto coverage page.
- Employees: see the workers' compensation coverage page.
- Advice or professional services: see general liability vs. professional liability.
Contracts can also ask for endorsements, such as additional insured status. ISO's BOP program alone lists 28 additional insured endorsements. Our certificate holder vs. additional insured guide explains how to check them.
Compare BOP offers on price
California's insurance department says the premium for qualifying businesses "can be very competitive," and the NAIC says a BOP can be "a less costly option than buying individual policies" for many small businesses. Compare offers only after the sections above match, or note each difference next to the price.
If you want PolicyBenchmark to follow up about a BOP, request coverage help.
Sources checked October 3, 2026. ISO figures describe its standard program; your insurer's forms and your state's rules may differ.
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This content is for informational purposes only and does not constitute insurance advice. Always consult with a licensed insurance professional before making coverage decisions.