Small Business Insurance Bundles: What Startups Need to Know About BOPs

Starting a small business is exciting. But if you don’t have the right insurance, one accident, fire, or lawsuit could wipe out everything you’ve built. That’s where a Business Owner’s Policy - or BOP - comes in. For most startups with a physical location, inventory, or customer foot traffic, a BOP isn’t just smart. It’s essential.

What Exactly Is a Business Owner’s Policy?

A Business Owner’s Policy (BOP) is a single insurance package that combines three core coverages most small businesses need: general liability, commercial property, and business interruption. Think of it like homeowners insurance - but for your business. Instead of buying three separate policies and juggling multiple bills, you get one policy, one deductible, and one renewal date.

According to the Insurance Information Institute, BOPs are designed for businesses with standard risk profiles - the kind that don’t need custom, enterprise-level coverage. That’s why they’re perfect for most startups: a coffee shop in Missoula, a local printer, a boutique retail store, or even a home-based consulting business.

Most BOPs include:

• General liability: Covers third-party injuries on your property, like a customer slipping on a wet floor, or damage to someone else’s property caused by your business operations.
• Commercial property: Protects your building, furniture, equipment, inventory, and even signage if they’re damaged by fire, wind, theft, or other covered events.
• Business interruption: Pays for lost income and ongoing expenses (like rent and payroll) if your business has to close temporarily due to a covered disaster.

That’s it. No more, no less - unless you add extras. And that’s where things get interesting.

What a BOP Doesn’t Cover (And Why It Matters)

Here’s the hard truth: a standard BOP leaves big gaps. If you assume it covers everything, you’re setting yourself up for a nasty surprise.

BOPs explicitly do not cover:

• Workers’ compensation
• Commercial auto insurance
• Professional liability (errors and omissions)
• Cyber liability
• Health or disability insurance

Let’s say you’re a startup offering graphic design services from your home. You don’t have a storefront, but you do have a laptop, a printer, and clients who pay you for custom work. One client sues you, claiming you copied their logo. That’s professional liability - not covered by your BOP. Or worse: a hacker steals your client database. That’s cyber liability - also not covered.

Or maybe you have one part-time employee who drives your van to deliver products. If they get into an accident, your BOP won’t touch it. You need commercial auto insurance - separate.

Startups often skip these add-ons because they think they’re too expensive. But the cost of a single lawsuit or data breach can be 10x what you’d pay for the extra coverage.

Who Really Needs a BOP?

Not every startup needs a BOP. If you’re a solopreneur running a blog or a digital agency with no physical assets, you might be better off with just general liability and cyber insurance.

But if your business has any of these, a BOP is a must:

• A physical location - even a rented office or retail space
• Inventory, equipment, or furniture you own
• Customers or clients who visit your premises
• A landlord or client who requires proof of insurance

For example, a bakery in downtown Missoula that sells pastries to walk-in customers needs a BOP. Their oven, mixers, and flour inventory are all covered. If someone trips on a loose tile and breaks their wrist, the liability part kicks in. If a fire damages the shop, business interruption pays rent and salaries while they rebuild.

On the flip side, a freelance web developer working from a coffee shop with no equipment or clients coming to their home? They probably don’t need property coverage. But they do need professional liability - and that’s not in a BOP.

Cost and Savings: Is a BOP Really Cheaper?

Yes. A BOP usually costs less than buying the same coverages separately. Insureon reports that bundling general liability and property insurance into a BOP can save small businesses 10-25% compared to buying them as standalone policies.

For most startups, a basic BOP runs between $500 and $1,500 per year. That’s less than $130 a month. Some home-based businesses pay as little as $300 a year.

But here’s what matters more than the price tag: what you’re protected against.

Let’s say your $1,200 BOP saves you from a $50,000 lawsuit after a customer slips and falls. That’s a 4,000% return on your investment. Or imagine your laptop and printer get stolen. If your BOP covers $10,000 in property loss, you just saved yourself from having to pay out of pocket.

What you’re really paying for isn’t just insurance - it’s peace of mind.

Customizing Your BOP: Add-Ons Startups Can’t Ignore

A BOP isn’t a one-size-fits-all. Most insurers let you add endorsements - small, affordable upgrades that plug critical gaps.

Here are the top three endorsements startups should consider:

1. Cyber liability: Covers data breaches, ransomware, phishing attacks, and legal costs if customer data is stolen. For any startup handling emails, payment info, or client files - this is non-negotiable. Adds $200-$600/year.
2. Professional liability (E&O): Protects you if a client claims your work was negligent or caused them financial harm. Essential for consultants, designers, developers, and service providers. Adds $300-$800/year.
3. Equipment breakdown: Covers repair or replacement of essential machinery - like a commercial oven, HVAC system, or photocopier - if it suddenly fails. Adds $150-$400/year.

Don’t just accept the default BOP. Ask your agent: “What endorsements do most businesses like mine add?”

How to Get a BOP: The Startup’s Step-by-Step Guide

Getting a BOP is easier than you think. Here’s how to do it right:

1. Know your risks: List your assets (equipment, inventory, location), your customer interactions, and your services. What could go wrong?
2. Get quotes from at least three providers: Use online platforms like Insureon, Coterie, or The Hartford. They let you compare bundled policies side-by-side.
3. Don’t skip the fine print: Read what’s excluded. If you’re unsure, ask: “Does this cover [specific risk]?”
4. Add the right endorsements: Based on your business type, pick 1-2 add-ons that match your actual needs.
5. Get your certificate of insurance: Landlords, clients, and event venues often require proof. Make sure your policy includes this document.

Most applications take under 15 minutes. You’ll need your business address, estimated annual revenue, and a list of your major assets. No lawyer required.

What Happens When You Don’t Have a BOP?

One real-world example: a startup in Bozeman launched a custom furniture business. They had a small workshop and a website. They thought they didn’t need insurance because they were “just starting out.”

Then, a customer tripped over a power cord in the workshop and broke their ankle. Medical bills totaled $28,000. The customer sued. The startup had no liability coverage. They had to pay out of pocket - and lost their savings, their equipment, and their business.

That’s not a hypothetical. It happens every day.

Insurance isn’t about expecting disaster. It’s about making sure you survive it.

Final Thought: BOPs Are the Foundation, Not the Whole House

A BOP is the bedrock of small business insurance. For most startups, it’s the smartest, most affordable way to protect your physical assets and your reputation.

But it’s not a magic shield. You still need to evaluate your unique risks. If you’re selling digital services, add cyber and professional liability. If you have employees, get workers’ comp. If you use a vehicle for business, get commercial auto.

Start with the BOP. Then build on it - step by step. That’s how you turn a risky startup into a resilient business.