Who is eligible for a business owner’s policy (BOP)?

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Jul 16, 2021

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Small businesses with up to 100 employees and revenues of up to a about $1 million are candidates for a BOP. Some types of businesses, such as restaurants, may be ineligible for BOPs. If so, they should look at the individual coverages they need and purchase them separately. Of course, underwriting standards will vary from company to company. Therefore, the buyer should check with several companies to find out what is available.

Typically, businesses such as traditional retailers (furniture stores, clothing stores, hardware stores, offices, etc.) are candidates for BOP. Restrictions usually limit the size and types of occupancies in the eligible building.

Apartment buildings, office buildings some small contractors are often eligible (subject to various limitations on size and other characteristics).

Restaurants are generally not eligible, but many fast food or limited cooking restaurants may be.

Eligibility requirements vary from one insurance company to another. The following are generally not eligible:

1. Automotive businesses

2. Bars, grills restaurants

3. Manufacturing firms

4.Single or double family dwellings

5. Places of entertainment

6. Financial institutions

Again, the details of eligibility vary from insurance company to insurance company.

For business owners who operate the business out of their home there is a possibility of adding an endorsement to the homeowner’s policy to cover the business risks or separate policy such as a BOP or commercial package.

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