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How Much Does a Business
Owner’s Policy Cost?

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The Business Owner’s Policy Cost

Many sites want to provide you with the average or median monthly cost of a business owner’s policy. However, knowing the average that an agency, company or online service quotes or issues business insurance isn’t that informative.

The cost of a business owner’s policy depends many factors, which vary from company-to-company and industry-to-industry.

If a site provides you the average cost of a business owners policy, can you expect to pay the median or average premium? Not necessarily.

Insurance companies determine business insurance premiums using several basic factors. These factors include the business classification or industry, the number of employees and the amount of coverage requested. Therefore, your business can expect to pay the average or median monthly premium if you are the average company for the agency, company or online site providing the those costs. In fact, averages and medians are biased toward the types of business most frequently written by the company providing the statistic.

The better thing to understand is how these factors influence the cost of a business owner’s policy. This can help you help you find the best combination of price and protection for your business. Frankly, the best way to know is to get a quote, call us now, or begin a quote online.

What affects your business owner’s policy costs

There are several factors that play a role in calculating your business owner’s policy cost. The two most influential factors will be the business classification or industry, and the second will be the exposure calculation. The exposure calculation may be done by using the number of employees or the total annual revenues. These two items are then calculated against the amount of coverage you need. These factors can vary significantly from business to business.


Not all business types carry the same amount of risk. A business type known to have higher risk can expect to pay more than a business with lower risk. Tree trimmers and contractors are examples of higher risk businesses. Their work is physical and often includes using power tools on other peoples’ properties. These factors increase exposure.

In contrast, a home-based financial advisor doesn’t share these risks, so they won’t be factored into their rate. Will they pay less? Probably, but not for certain. Professional services are exposed to a different type of risk, and they often need carry professional liability insurance to stay safe.

Number of employees

Businesses with several employees can expect to pay more for insurance because their potential for claims are higher than a business with fewer, or no, employees. Each additional employee increases exposure to accidents and other mishaps that may result in a claim.

If a business has employees, it needs to carry workers compensation coverage. This is required by law in almost every state, and it adds to the cost of insuring your business.

Coverage needs

The amount of coverage you select has an impact on your premium. For example, a small business policy with a $1 million/$2 million aggregate, will generally cost more than a policy with a $1 million/$1 million aggregate.

What is an aggregate limit?

An aggregate limit is the most an insurance company will pay toward a claim during a policy term. If your policy limits are $1 million/$1 million aggregate, you’re covered up to $1 million for a single incident, but no more than $1 million for the policy term. The length of your policy term ultimately depends on your carrier, but annual terms are the most common.

For example, a carpenter is sued by 3 clients over the course of a year due to damages caused by faulty workmanship. Each client sues for $500,000, totaling $1.5 million. Individually, each incident is under $1 million, which meets policy limits. However, the annual aggregate amount is exceeded, meaning the third incident will not be covered.

These coverage levels typically can be adjusted to meet your specific needs, and they affect your final rate.

These three factors represent the basics, and every small business owner should be familiar with them. Of course, there are other factors that can affect your business insurance costs including:

  • Property
  • Equipment
  • Location
  • Time in business
  • And more

There’s a lot to consider when insuring your business, but getting help is easy. Just try to make sure you talk to someone with experience in insuring small businesses. Learn which business insurance coverages you might want to consider for your business.

Let’s Start a Business Owner’s Policy Quote

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Call 877-334-7646 to speak with a business specialist.

Got Questions about BOP Policies?

How much BOP coverage do I need?

The amount of BOP coverage you need depends on factors such as the type and size of your business, number of employees, and the type of customers you typically work with. However, many small businesses opt for the standard $1 million / $2 million small business policy. This means the policy will pay up to $1 million to cover any one claim, with a $2 million limit for the lifetime of the policy, which is typically one year.

Is a business owner’s policy required by law?

A BOP consists of general liability insurance and commercial property insurance. Neither policy is required by law. However, many of the people you do business with will likely have general liability insurance requirements. You may need this policy if you want to sign a client contract with these requirements. Proof of general liability coverage is also required to apply for certain professional licenses.

Additionally, many commercial landlords require tenants to purchase commercial property insurance. A landlord might ask to see proof of coverage before you can sign a lease.

What coverage does a business owner’s policy provide for social media risks?

The general liability portion of your BOP includes what’s known as advertising injury coverage. It provides protection for lawsuits related to libel, slander, and invasion of privacy, as well as copyright or brand infringement. That means if you are sued for writing something negative about a competitor on social media, you’re covered.

Does a business owner’s policy cover independent contractors?

A business owner’s policy covers you and your employees, but typically does not include coverage for independent contractors. You can either add contractors to your policy on a temporary basis as an additional insured, or require them to purchase their own general liability insurance. When hiring a contractor, it is best to require them to provide you a certificate of liability insurance as evidence they have the property liability protections for you.

Is it easy to buy a business owner’s policy with IronPoint?

How quickly can I get insurance coverage?

Our online application for a business owner’s policy takes just a few minutes to complete. In most cases, we’ll deliver quotes as directly after you finish the application. Once you purchase a policy, we can email you a certificate of insurance, which is the formal proof-of-insurance document you need to show when you sign certain contracts or apply for professional licenses.

How does the business owner’s policy application work?

The business owner’s policy application requires some basic information about your business, including where it’s located, number of employees, and estimated revenue for the upcoming year. Since it includes general liability, you’ll need the same application information as you would for general liability – along with information about your business property.

The application will take just a few minutes to complete. When you’re finished, you’ll receive quotes from multiple carriers. Look them over and pick the one that works best for you. A licensed insurance agent is available to assist you throughout the process.

What kind of businesses are eligible for a BOP policy?

We specialize in small business insurance for a large number of industries. Low-risk businesses with fewer than 100 employees are typically eligible for a BOP.

Our insurance agents have helped more than 125,000 businesses in segments including:

  • Building design
  • Automotive Repair
  • Consulting
  • Food and beverage
  • Healthcare
  • Insurance
  • Nonprofits
  • Photo and video
  • Professional services
  • Real estate
  • Retail