Businessowners Policy

The Businessowners Policy (BOP) is designed for small to medium size businesses.

BOP policies are structured and priced to fill the need of a multitude of businesses which have similar risk characteristics. The basic concept is that small businesses of all kinds have more in common with each other than they do with large risks in the same kind of business.

BOP policies may be written for eligible retail, apartment, office, service, and processing risks and are available for owners of buildings and tenants of retail, service, and processing operations. In addition to the type of business for which coverage is being sought, the building height, area square footage, number of units and annual gross sales are determining factors for eligibility under the BOP program.

Applications for coverage under the BOP program require three (3) declinations from other insurance carriers, one of which must be from a surplus lines carrier.

General categories of risks eligible for a BOP policy include:

Lessors’ Risks

  • Apartment buildings (including residential condominium associations) not exceeding six (6) stories in height and containing at least five but no more than 60 dwelling units. Incidental office and eligible mercantile, service or processing occupancies which do not exceed 15,000 total square feet are permitted.
  • The building owner’s personal property in furnishing the apartment building is eligible for contents coverage.
  • Office buildings (including office condominium associations) occupied principally for office purposes, not exceeding six (6) stories in height or 100,000 square feet. Incidental eligible mercantile occupancies which do not exceed 15,000 square feet in total are permitted.

Processing and Servicing Risks

The following requirements must be met in order for processing, servicing, and retail risks to be eligible for coverage under the BOP Policy:

  • No more than 25% of gross sales may be from off-premises operations.
  • The risk cannot occupy more than 15,000 square feet in total area.
  • The annual gross sales per location cannot exceed $1 million.

The descriptions below are intended as an overview only. Please read the applicable forms and endorsements for complete terms, including definitions, conditions and exclusions. Click here to see a sample Businessowners Policy.

Policy Form

The FAIR Plan’s BOP Policy package consists of three standard forms of commercial coverage (Common Policy Conditions, Standard Property Coverage Form, and Businessowners Liability Coverage Form) for which an indivisible package premium is charged. The standard form includes Building coverage and Business Personal Property on a replacement cost basis, with an ACV (actual cash value) option for building coverage. Business Income and Extra Expense coverage is included on an “Actual Loss Sustained” basis.


  • Fire
  • Lightning
  • Explosion
  • Windstorm or Hail
  • Smoke
  • Aircraft or Vehicles
  • Riot or Civil Commotion
  • Vandalism
  • Sprinkler Leakage
  • Sinkhole Collapse
  • Volcanic Action
  • Transportation
  • In addition, the liability portion of the policy includes protection for business liability and medical expenses.



Includes coverage for the building, completed additions, permanently installed fixtures, machinery, and equipment, outdoor fixtures and furniture, floor coverings, and other similar property typically used to maintain the building.

Business Personal Property

Covers business personal property (as defined in the policy) in or on the building or in the open within 100 feet of the described premises.

Personal Property of Others

Covers personal property of others in the care, custody, and control of the insured within the described premises or within 100 feet of the described premises.

Replacement Cost

The BOP policy is written on a replacement cost basis for qualifying properties. Buildings 25 years or older must have upgraded the roof, wiring, plumbing and heating within the last 25 years to qualify. Properties that do not qualify for replacement cost will be written on a fair market value/actual cash value basis.

Business Liability

Includes coverage for bodily injury, property damage, personal injury and/or advertising injury. Coverage applies only to those premises and operations designated in the Declarations.

Medical Expenses

Covers medical expenses for bodily injury caused by a covered loss.

Debris Removal

Provides up to 25% of the amount we pay for direct physical loss or damage to the covered property.

Preservation of Property

Covers the direct physical loss or damage to covered property while it is being moved or temporarily stored at another location to preserve it from loss or damage from a covered peril.

Fire Department Service Charge

Up to $1,000 of the liability limit for fire department service charges contracted prior to a loss or required by local ordinance.

Pollutant Cleanup and Removal

Up to $10,000 for expenses to extract pollutants, as defined by the policy, from land or water at the described premises if the release, discharge or dispersal of the pollutants is caused by a covered peril.

Business Income

Coverage for the actual loss of business income sustained due to the necessary suspension of operations caused by a covered property loss during the period of restoration, as defined by the policy.

Extra Expense

Provides coverage for the extra expenses incurred to avoid or minimize the suspension of business and to continue operations.

Coverage Extensions

Limited coverage for the following extensions is in addition to the limits of insurance at no additional charge.

Personal Property at Newly Acquired Premises

Provides up to $10,000 coverage for up to 30 days for Business Personal Property at any newly acquired property.

Personal Property Off Premises

Covers Business Personal Property for up to $1,000 while in transit or at property not owned, leased, or operated by the insured.

Outdoor Property

Provides coverage for fences, radio and television antennas, signs (not attached to buildings), plants, shrubs, and trees caused by fire, lightning, explosion, riot or civil commotion, or aircraft damage. Coverage is up to $1,000 with a $250 per item limit for trees, shrubs, and plants.

Valuable Papers and Records

Cost of Research – Provides up to $1,000 coverage to research, replace, or restore lost information on lost or damaged valuable papers and records (including electronic or magnetic media).

Optional Coverages

For an additional premium, the following optional coverages may be requested subject to meeting the necessary underwriting requirements.

  • Burglary and Robbery: Maximum limit is $15,000 or 25% of business personal property, whichever is less.
  • Money and Securities: $5,000 on Premises, $2,000 off Premises.


Every policy has a deductible to be applied once per covered loss. Deductible available are: $500; $1,000; and $2,500. The higher the deductible, the lower the premium will be.