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What is a home business insurance BOP?

Chelsey Tucker graduated with a Bachelor of History degree from Metropolitan State University in 2019. She now writes about insurance with her specialty being life insurance and has been quoted...

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years. He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella...

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UPDATED: Mar 19, 2020

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home business insurance bopIf you operate a business in your home, you may have heard of a home business insurance BOP. A BOP stands for business owner’s policy and this type of policy can be very beneficial for those who operate businesses out of their homes. The purpose of a BOP is to provide a complete portfolio of different policies, making it a comprehensive insurance policy for businesses.

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Purpose of a BOP

The main purpose of a home business insurance BOP is to cover the risks small business owners face. If a person runs a business from their home, their standard home insurance policy will not cover all of the things a BOP will. With a standard homeowner’s policy, a person’s property is covered from events such as fires, floods, etc.

A BOP covers much more. Most homeowner’s policies do not; however, cover business property, within a home business, or if it does, it is limited to a dollar amount.

Business Property

Business property includes all assets used for business purposes. Depending on the type of business, this can be limited to a desk, computer and filing cabinet; or can be as extensive as those items plus equipment, machines and much more. With a BOP, all business property is covered under the policy.

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Coverage

A BOP covers many things for a small home business owner. Some things that are covered are obvious; while other things are not so evident.

– Data

If a fire occurs in your home, where your business is located, you will most likely lose some, or all, of your business data. This includes your files, books, software and any other paperwork relating to your business. With a BOP, data is covered through the policy.

– Injuries

liability insurance

If a client comes to your home and incurs an injury, without a BOP, you are not protected from this. If this happens, the client can sue you personally, for his injuries. With a home business insurance BOP, these types of incidents are covered under the policy.

– Liability

A BOP is also designed to protect a small home business owner from damages that occur from his business. This includes things such as harm to others, from his business. For example, if you write a story that harms someone, and they sue you, your BOP will cover the losses, if any occur. This includes libel, slander and copy infringements.

– Loss of Income

Another huge aspect of a BOP is that these policies protect you from loss of income. If you become ill, injured or are unable to work, you can receive compensation through the insurance company.

– Other Items

In addition to these things, a BOP covers activities such as crime and theft as well as all business property, located at or away from the home.

What Sets this Insurance Apart?

The main thing that sets a home business insurance BOP apart from other types of insurance, is that it combines the aspects of both property insurance coverage and liability. Most of the time, these policies are less expensive to purchase, than if purchased separately through two different policies.

Customize your Policy

customize your policyIf you’re wondering how to choose a BOP policy, follow these steps:

1. List your assets, needs and risks. Make a complete list of what you need for your home business. Make sure you include all of the things you might consider risks, such as personal liability and loss of wages.

2. Call around. Start calling insurance companies. Explain to them what you are looking for and give them, or discuss with them, your list of things.

3. Compare the quotes. After receiving quotes, choose the one that works best for you, for the price quoted. Make sure you do not simply choose the cheapest quote, but instead, choose the best one. If one quote is substantially less than the others, it is quite possible that the quote is missing something significant.

Other Considerations

There are numerous other things to consider with a BOP policy. One question to ask the insurance companies is whether your vehicles will be covered under this policy. Many times, they are not, and a person must get an auto insurance policy for them.

To reduce your premiums for a BOP policy, ask your insurance company to raise your deductible. This can significantly decrease a policy premium, in many cases. Another important thing to consider is that some companies will offer suggestions regarding how to lower the premium on the policy. Sometimes there are certain workplace safety and liability prevention steps a business can take to help reduce the policy.

Final Thoughts

It is important for all home business owners to have proper insurance coverage. Most likely, you may never need to make a claim, but if you do, you will be covered. Unexpected things do happen, and ironically, they happen when you least expect them. Compare quotes, choose the right one for you, and free yourself from worries that might occur.

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