If you own a coffee shop in downtown Raleigh, a small office near North Hills, a salon in Cary or a boutique in Wake Forest, a business owner's policy is probably the first commercial policy an agent will talk to you about. A BOP puts the two coverages most small businesses need, property and liability, into one package that's simpler to buy and manage.
This guide explains what a BOP covers, which add-ons are worth asking about, what it leaves out, and how to tell whether your Raleigh business is a good fit. It's general information, not legal advice, a quote or a description of any specific policy.
What a business owner's policy bundles
Most BOPs are built from three core pieces.
Property coverage
The property side covers physical things your business owns or is responsible for, subject to the policy's covered causes of loss and exclusions:
- Your building, if you own it.
- Business personal property: furniture, computers, equipment, fixtures and inventory.
- Tenant improvements you paid for in a leased space, such as build-out, flooring or lighting, depending on the policy and your lease.
Ask whether property is valued at replacement cost, what it costs to replace with new, or actual cash value, which subtracts depreciation. The difference matters a great deal after a fire or a burst pipe.
Business income
If a covered property loss forces you to close, such as a kitchen fire or a tree through the roof, business income coverage helps replace lost net income and pay continuing expenses like rent and payroll while you rebuild, subject to the policy's time limits and waiting period. Many BOPs also include some extra expense coverage for the cost of operating from a temporary location. For more detail, see our business interruption insurance page.
General liability
The liability side responds when a third party says your business caused bodily injury or property damage, like a customer slipping on a wet floor, or a technician damaging a client's equipment. It typically also covers certain personal and advertising injury claims and pays defense costs. It's the same core protection as a standalone general liability policy, packaged with your property coverage.
Common add-ons worth asking about
One of the advantages of a BOP is that many insurance companies offer endorsements you can add without buying a separate policy. Availability varies, but common options include:
- Equipment breakdown for sudden mechanical or electrical failure of things like HVAC units, walk-in coolers, compressors and point-of-sale systems.
- Spoilage for refrigerated food or inventory lost when power or equipment fails, important for restaurants, florists and grocers.
- Hired and non-owned auto for liability when employees run errands in their own cars or you rent a vehicle. It doesn't replace business auto insurance for vehicles you own.
- Employee dishonesty for theft of money or property by an employee.
- Data breach or cyber coverage for notification and response costs if customer information is exposed. Larger exposures usually call for a standalone cyber liability policy.
- Utility service interruption for income lost when power or water to your location is cut off.
- Outdoor signs, glass, and money and securities coverage, which may have low sub-limits in a base policy.
What a BOP usually doesn't cover
A BOP is broad, but it isn't everything. Plan on separate coverage for:
- Workers' compensation. Employee injuries on the job are generally excluded from general liability. In North Carolina, businesses that regularly employ three or more employees are generally required to carry workers' comp. Our guide to workers' compensation in Raleigh explains the rules.
- Vehicles you own. Company cars, vans and trucks belong on a commercial auto policy. See our guide to commercial auto insurance in Raleigh.
- Professional mistakes. If you give advice or provide professional services, claims that your work caused a client a financial loss usually need errors and omissions coverage.
- Employment claims. Discrimination, harassment and wrongful termination claims typically fall under employment practices liability.
- Flood and earthquake. Rising water is generally excluded. Even inland, parts of Wake County sit near creeks and low-lying areas, and heavy rain from tropical storms can cause flooding well away from the coast. A separate commercial flood policy fills that gap.
- Tools and equipment away from your premises. Property coverage often has limited or no coverage for items in transit or at job sites. Inland marine coverage is the usual fix.
Raleigh-specific things to check
Wind and storm deductibles. Hurricane remnants, severe thunderstorms and winter ice storms all bring down trees across the Triangle. Many BOPs cover wind damage, but some policies carry a separate wind, hail or named-storm deductible. Know what yours is before storm season.
Your lease. Retail centers, office parks and mixed-use buildings around Raleigh commonly require tenants to carry general liability with specific limits, name the landlord as an additional insured, and provide a certificate of insurance before move-in. Some leases also make the tenant responsible for glass, HVAC or improvements. Give your lease to your agent so the policy matches what you signed.
Higher liability limits. Contracts with larger clients, property managers or public agencies sometimes require more liability than a BOP's limits. A commercial umbrella can add a layer above your BOP's liability, auto and employer's liability coverage.
Who is a good fit for a BOP
BOPs are designed for small and mid-sized businesses with fairly predictable operations. Common examples include:
- Professional offices such as accountants, consultants and real estate offices
- Retail stores and boutiques
- Many restaurants, cafes and bakeries
- Salons, studios and fitness centers
- Dental and other small medical offices, usually alongside professional liability
- Small apartment or mixed-use building owners, depending on the insurance company
Each insurance company sets its own eligibility rules, typically based on the type of business, revenue, square footage and number of employees. Businesses with heavier hazards, like many trade contractors, manufacturers or bars with significant alcohol sales, may be placed on separate commercial property and liability policies instead. That isn't necessarily worse; it can allow coverage to be tailored more closely.
If you run your business from home, start with our guide on home-based business insurance, because a homeowners policy usually provides very limited coverage for business property and liability.
What to have ready for a BOP quote
- Business name, how it's organized and a short description of what you do
- Your address, and whether you own or lease the space (and a copy of the lease if you have one)
- Building details if you own it: year built, construction type, square footage, roof age, and updates to wiring, plumbing and HVAC
- An estimate of what it would cost to replace your furniture, equipment and inventory
- Annual revenue and payroll, and number of employees
- Current policy declarations and any claims in the last several years
- Any contract or lease insurance requirements you need to meet
Talk with a Raleigh independent agency
Shadow Lake Insurance is an independent agency, so we can compare BOPs from the insurance companies we represent instead of offering a single option. We'll check your lease and contracts, look at which endorsements fit your operation, and point out gaps, like workers' comp, auto or flood, that a BOP won't fill. If you're still mapping out everything your business needs, see our guide to essential business insurance for Raleigh companies.
Shadow Lake Insurance 8398 Six Forks Road, Suite 202, Raleigh, NC 27615 (276) 597-9844
Ready to compare? Start a BOP quote or request a quote, or call or text our office.
Sources
- North Carolina General Statutes, G.S. 97-2, Workers' Compensation Act definitions
- North Carolina Industrial Commission
- North Carolina Department of Insurance, Consumer information
- FEMA National Flood Insurance Program, FloodSmart
Coverage subject to policy terms, conditions, and underwriting. This article is general information, not a description of any specific policy or a promise of coverage. Review your policy or talk with us about your situation.