A business owners policy (BOP) can insure small and medium-size businesses against multiple business perils by providing property, liability, and business interruption insurance coverage. It is a type of commercial package policy and is designed for relatively small retail businesses, certain processing and service businesses, and businesses that operate out of small office, condominium, or apartment buildings. The typical landlord or business owner who has a business owners policy has a single location business, with predictable risks and, at most, a moderate level of insurance exposure. The property coverage includes buildings and business owned personal property. The liability coverage includes bodily injury, property damage, personal injury, and advertising injury.

The types of businesses that typically can obtain a BOP include:

• Appliance repair shops
• Bakeries
• Dental laboratories
• Funeral homes
• Hair salons
• Laundries and dry cleaners
• Locksmiths
• Photocopying centers
• Shoe repair shops
• Watch, clock, and jewelry repair shops

• Bars
• Restaurants
• Banks and other financial institutions
• Auto dealers and repair shops
• Manufacturers
• Amusement parks
• Theaters

The structure of a BOP involves four parts: declarations, policy conditions, a business owners liability form, and either a standard or special property form. The declarations and conditions are much like those for a commercial package policy. The liability form, as mentioned above, covers bodily injury, property damage, personal injury, and advertising injury. You have the option of either a standard property form that insures against specific named perils, or a special property form that offers open peril coverage. For general background on commercial property coverage, see Buildings and Equipment.