Business License Guide

Guide for LLC owners

Business Owner's Policy for LLCs — BOP Coverage, Eligibility, Property & Interruption Limits (2026)

Business owner's policy guide for LLCs: GL, commercial property, business interruption, BOP eligibility, replacement cost vs ACV, and when BOP beats separate policies.

Last verified: 2026-05-08 Official sources linked below

Time to complete

1–10 business days.

Steps

6

Timing note

Photos, leases, property schedules, or building-protection details can be required before binding restaurants, older properties, or higher-value inventory.

Before you start

What to know first

  • A Business Owner's Policy bundles general liability, commercial property, and business interruption into one package for eligible small businesses.
  • GL inside a BOP covers third-party bodily injury, property damage, personal injury, and advertising injury. It does not replace workers comp, professional liability/E&O, commercial auto, cyber, or liquor liability.
  • Commercial property inside a BOP covers business personal property such as furniture, fixtures, inventory, equipment, computers, tools kept at the premises, and tenant improvements. Real property coverage applies only if the LLC owns the building and schedules it.
  • Replacement cost pays to replace covered property with new property of like kind and quality without depreciation, subject to policy terms. Actual cash value subtracts depreciation and is cheaper but produces smaller claim payments.
  • Business interruption, also called business income coverage, replaces lost income and continuing expenses when covered property damage forces the business to suspend operations during the period of restoration.
  • Many BOP forms include a 72-hour waiting period before business interruption begins. That means the first three days of income loss after a covered shutdown may not be paid.
  • The business interruption limit is usually based on expected net income plus continuing normal operating expenses for the selected period, not simply monthly revenue. Payroll, rent, utilities, loan payments, and seasonal revenue need to be modeled correctly.
  • The period of restoration is the reasonable time needed to repair, rebuild, or replace covered damaged property and resume operations, subject to the policy's maximum period and civil authority limitations.
  • BOP eligibility is limited. Many insurers require fewer than 100 employees and less than $5M in revenue, plus a low-to-moderate-risk industry and acceptable property values. Larger entities need separate GL, property, and business-income policies.
  • A BOP fits retail, restaurants, salons, studios, warehouses, light manufacturers, and physical offices. Professional services with little property exposure often do better with standalone GL plus E&O.

Documents

What you'll need

  • LLC legal name, EIN, address, and premises location
  • Lease or property ownership details, including landlord insurance requirements
  • Business personal property schedule: inventory, equipment, furniture, fixtures, computers, and tenant improvements
  • Estimated annual revenue, net income, payroll, and continuing expenses for business interruption limits
  • Square footage, building construction type, fire protection, alarms, sprinklers, and year built
  • Prior property or GL claims history
  • Desired valuation basis: replacement cost or actual cash value
  • Certificates or additional insured requirements from landlords, lenders, or clients

Process

Step by step

  1. Confirm BOP eligibility Check employee count, revenue, industry, premises type, property values, and claims history. If the LLC is above common thresholds such as 100 employees or $5M revenue, or operates in a high-risk class, expect separate GL and property policies instead of a BOP.
  2. Inventory business property List business personal property, inventory, equipment, furniture, fixtures, signs, tenant improvements, and leased equipment. Use replacement cost values unless cash savings matter more than claim recovery.
  3. Calculate business interruption exposure Estimate net income plus continuing expenses over the likely period of restoration. Include rent, payroll you intend to keep, utilities, loan payments, taxes, and seasonal revenue swings. The wrong limit is usually discovered only after a shutdown.
  4. Compare BOP against separate GL plus property For retail, restaurants, offices, salons, and other premises-based businesses, BOP bundling usually saves money and closes gaps. For advice-based professional services with little property, standalone GL plus E&O may be more efficient.
  5. Add endorsements for missing exposures Consider equipment breakdown, spoilage, utility interruption, cyber, employee dishonesty, hired-and-non-owned auto, liquor liability, or professional liability. A BOP is a base package, not an all-risk business policy.
  6. Bind and send certificates After binding, issue certificates for landlords, lenders, or clients. Confirm the policy lists the right premises, property values, mortgagee/loss payee, and additional insured wording.

Costs

What it costs

Item Amount Notes
Next Insurance — BOP for retail, office, service, and small storefront LLCs Quote-based; common range $500–$2,500/year Best for small businesses that want GL, property, and certificates managed online.
Hiscox — BOP for professional offices and lower-risk service LLCs Quote-based; common professional-office range $500–$1,800/year Strong for consultants, agencies, and professional-service offices that need GL plus light business personal property coverage.
Simply Business — BOP comparison marketplace Varies by carrier, location, property values, and industry Useful for comparing BOP quotes across carriers when eligibility is uncertain.
biBERK — direct BOP carrier for small businesses Quote-based; often competitive for straightforward Main Street risks Good fit for retail, offices, restaurants, and service businesses with standard property exposure.
Retail, office, salon, and light service BOP $500–$2,500/year Depends on premises size, business personal property values, revenue, foot traffic, protection class, and selected business interruption limit.
Restaurant or food-service BOP $1,000–$5,000+/year Cooking, customer traffic, spoilage, equipment breakdown, liquor liability, and high property values can push restaurants above standard small-office BOP pricing.

FAQ

Common questions

What does a BOP include?

A BOP typically bundles general liability, commercial property, and business interruption/business income coverage into one policy for eligible small businesses.

Who is eligible for a BOP?

Eligibility varies by carrier, but many insurers look for fewer than 100 employees, less than $5M in revenue, acceptable property values, and a low-to-moderate-risk industry. Larger or high-risk businesses usually need separate policies.

What is business personal property?

Business personal property is movable property used by the LLC: inventory, furniture, computers, equipment, tools, fixtures, and sometimes tenant improvements. It is different from real property, which means the building or land.

Should I choose replacement cost or actual cash value?

Replacement cost is usually better for operating businesses because it pays closer to the cost of buying new replacement property. Actual cash value subtracts depreciation, reducing premiums but also reducing claim payments.

How does business interruption coverage work?

It replaces covered lost income and continuing expenses when covered property damage forces a suspension of operations. Many policies have a 72-hour waiting period and pay only during the period of restoration, subject to limits.

Should a consultant buy a BOP?

Only if the consultant has meaningful office property, leased space, or contract requirements. Many professional-service LLCs with no storefront are better served by GL plus E&O.

Is BOP better than standalone GL?

For businesses with premises, inventory, equipment, or storefront exposure, yes, because BOP adds property and interruption coverage. For pure service businesses with little property, standalone GL plus professional liability may fit better.

Provenance

Legal basis & official sources

Last verified 2026-05-08.

BOP coverage is a private commercial insurance package, not an LLC formation filing. Policy structure is based on carrier forms that package commercial general liability, commercial property, and business income/business interruption coverage. Lease contracts, lender agreements, and franchise agreements often create practical BOP requirements by requiring GL certificates, property coverage, lender loss-payee wording, or business income protection.

Direct filing portal: https://www.sba.gov/business-guide/launch-your-business/get-business-insurance

If you skip this

  • A fire, theft, burst pipe, or covered storm can destroy inventory or equipment with no property claim payment if the LLC carries only GL
  • A forced shutdown can leave rent, payroll, loan payments, and lost income uncovered if business interruption is missing or under-limited
  • Commercial landlords can refuse possession or declare lease default when required GL/property certificates are missing
  • Actual cash value coverage can leave the LLC short of replacement funds because depreciation is deducted
  • Buying separate policies without checking overlap can cost more and still miss business income or tenant-improvement coverage

Official sources

§ A Related guides

§ C Companion tools

Disclaimer: Informational only, not legal or tax advice. Rules change, so confirm with a business attorney or CPA before you act.