Business Owner’s Policy for Contractors
THREE IMPORTANT BUSINESS EXPOSURES. ONE INSURANCE PACKAGE.
What Is a Business Owner’s Policy for Contractors?
A Business Owner’s Policy packages several common commercial insurance coverages together. For eligible contractors, it can provide liability protection while also addressing property and income exposures that General Liability alone generally does not cover.
PROTECTION 01
General Liability
May help protect your business from certain qualifying third-party bodily injury, property damage, personal and advertising injury, completed operations, and related liability claims.
PROTECTION 02
Business Property
May help protect qualifying business property such as computers, furniture, supplies, inventory, and other covered property at an insured business location.
PROTECTION 03
Business Income
May help replace certain lost business income and continuing operating expenses when qualifying operations are suspended because of a covered property loss.
GENERAL LIABILITY VS. A BOP
The Difference Is What Happens to Your Own Business
General Liability primarily focuses on qualifying claims from other people or organizations. A BOP can extend the insurance strategy to certain property your business owns and certain income losses caused by covered property events.
GENERAL LIABILITY
Protects Against Certain Claims From Others
✓ Customer bodily injury claims
✓ Damage to qualifying third-party property
✓ Certain completed-operations claims
✓ Defense of qualifying covered lawsuits
BUSINESS OWNER’S POLICY
Can Add Protection for the Business Itself
✓ Includes qualifying General Liability coverage
✓ Adds covered business property protection
✓ Can include qualifying business-income coverage
✓ May offer additional endorsements and coverage options
WHEN LIABILITY INSURANCE ALONE MAY LEAVE A GAP
Which Contractors Should Consider a BOP?
A BOP may be worth considering when the business has property, a physical location, or operations that could be disrupted by a covered property loss.
You Have an Office
You maintain a dedicated office used for estimating, billing, scheduling, project management, or customer service.
You Operate a Shop
Your business uses a shop, warehouse, storage area, or other qualifying commercial location.
You Own Business Property
Computers, furniture, electronics, supplies, inventory, or other qualifying business property would be costly to replace.
Customers Visit You
Customers, vendors, employees, subcontractors, or other visitors regularly come to your business location.
A Shutdown Would Hurt
Losing access to your location after a covered property loss could disrupt scheduling, billing, communication, or administration.
You Want Broader Protection
You want to evaluate more than General Liability and build insurance around the business supporting your contracting operations.
ALREADY CARRY GENERAL LIABILITY?
Your Business May Have Exposures Beyond the Jobsite
If your contracting business owns property, operates from a commercial location, or depends on that location to generate income, it may be worth comparing General Liability with a Business Owner’s Policy.
THE PROPERTY BEHIND YOUR PROJECTS
What Business Property Could a Contractor Need to Protect?
A contractor’s most visible work may happen at the jobsite, but much of the business can depend on property located somewhere else. A BOP may insure qualifying business personal property at a covered location, subject to policy terms and limits.
Office Equipment
Computers, monitors, printers, phones, networking equipment, desks, chairs, shelving, and other qualifying administrative property.
Supplies & Inventory
Certain stored supplies, materials, inventory, and other qualifying property kept at an insured location.
Tenant Improvements
Certain improvements or betterments made to a leased office, shop, warehouse, or other qualifying business location may be insurable.
ONE OF THE MOST IMPORTANT DISTINCTIONS FOR CONTRACTORS
A BOP Does Not Automatically Mean Every Tool Is Protected Everywhere
Contractors frequently move expensive tools and equipment between their shop, trucks, trailers, temporary storage locations, and active jobsites. Property that travels may require different coverage than property that remains at an insured business location.
BOP PROPERTY COVERAGE
Property at the Insured Location
A BOP may cover qualifying business personal property at or within a specified distance of the insured premises, depending on the policy.
TOOLS & EQUIPMENT COVERAGE
Property That Travels With You
Mobile tools and equipment may require inland marine, contractor’s equipment, installation floater, or another appropriate form of coverage depending on the property and operation.
THE LOSS DOESN’T END WHEN THE FIRE IS OUT
What Happens if a Covered Loss Interrupts Your Business?
Replacing damaged property is only one part of recovering from a serious loss. Contractors may also face lost revenue and continuing expenses while their business location is being repaired or restored.
CONSIDER THIS SCENARIO
A Fire Damages Your Contractor Office
A qualifying covered fire damages the office where your business handles estimating, scheduling, invoicing, customer communication, payroll, and project management.
The property loss may be only the beginning. Your business could also lose access to the location and experience operational disruption while repairs are completed.
Potential Financial Impact
• Lost qualifying business income
• Continuing rent or lease obligations
• Certain ongoing payroll expenses
• Utilities and other continuing expenses
• Certain additional expenses needed to continue operations
Lost Business Income
May help replace certain qualifying income the business would have earned if a covered property loss had not interrupted operations.
Continuing Expenses
Certain normal operating expenses may continue even when your business cannot operate normally from the damaged location.
Extra Expense
Certain additional expenses incurred to avoid or minimize a qualifying business interruption may be covered, depending on the policy.
Important: Business-income coverage generally requires a qualifying covered cause of loss and is subject to policy conditions, waiting periods, limits, restoration periods, exclusions, and other terms.
PUTTING THE COVERAGES TOGETHER
What Could a Contractor BOP Claim Look Like?
Different parts of a BOP may respond to different types of qualifying losses.
LIABILITY
Customer Injured at Your Office
A customer slips at the contractor’s office and alleges that the business was responsible for the injury.
PROPERTY
Office Fire
A qualifying covered fire damages computers, furniture, electronics, supplies, and other covered business property.
PROPERTY
Break-In at the Shop
A burglary results in qualifying damage to the premises and theft of eligible covered business property.
LIABILITY
Property Damage Claim
Contracting operations accidentally cause qualifying damage to someone else’s property and the customer seeks compensation.
BUSINESS INCOME
Temporary Shutdown
A covered property loss prevents qualifying operations from continuing normally while the business location is restored.
COMPLETED OPERATIONS
Damage After the Job Is Finished
Completed work is later alleged to have caused qualifying bodily injury or property damage, subject to the liability policy terms.
A BOP IS A FOUNDATION—NOT THE ENTIRE INSURANCE PROGRAM
Coverage Contractors May Still Need Separately
Contractors can have specialized exposures that extend beyond a standard Business Owner’s Policy.
Commercial Auto
For qualifying business-owned vehicles and commercial automobile exposures.
Workers’ Compensation
For qualifying employee work-related injuries and applicable employer obligations.
Tools & Equipment
For eligible mobile tools and equipment that travel between locations and jobsites.
Builder’s Risk
For qualifying buildings and construction projects while work is underway.
Professional Liability
For certain qualifying allegations involving professional services, design, consulting, or advice.
Umbrella / Excess Liability
For additional qualifying liability limits when higher limits are needed or required by contract.
BOP ELIGIBILITY & FIT
Is a Business Owner’s Policy Right for Your Contracting Business?
Not every contractor or trade qualifies for every BOP program. Eligibility and the right insurance structure depend on the actual operations of the business.
A BOP May Be Worth Considering If…
✓ You qualify for a carrier’s contractor BOP program.
✓ You need General Liability.
✓ You have a business office, shop, or qualifying location.
✓ You own business property that would be expensive to replace.
✓ Customers or vendors visit your premises.
✓ A covered property loss could interrupt your operations.
You May Need More Than a Standard BOP If…
• Your operations involve higher-hazard contracting work.
• You have significant subcontracted exposures.
• You own substantial mobile equipment.
• Your business owns or operates commercial vehicles.
• Your contracts require specialized endorsements or higher limits.
• You have design, pollution, cyber, or other specialized exposures.
Contractor BOP Learning Center
Understand the Insurance Behind Your Business
Explore practical guides designed to help contractors understand how a BOP differs from General Liability and where additional coverage may be needed.
Contractor BOP Questions
Business Owner’s Policy FAQs for Contractors
Common questions about contractor BOP coverage, General Liability, business property, tools, business income, vehicles, employees, and eligibility.
PROTECT THE BUSINESS BEHIND EVERY PROJECT
Your Business Is More Than the Work You Perform at the Jobsite
Best Formula Insurance can help eligible contractors compare Business Owner’s Policy options that combine liability protection with coverage for qualifying business property and certain business interruptions.
Important: This page provides general insurance information and does not provide legal, contractual, construction, licensing, financial, safety, or risk-management advice and does not modify, expand, guarantee, or confirm insurance coverage, eligibility, pricing, or claim payment. Business Owner’s Policy coverage varies by insurance company, state, contractor classification, operations, property, location, revenue, payroll, subcontracted work, claims history, and individual circumstances. General Liability, business property, business income, extra expense, completed operations, additional insured coverage, tools and equipment, property away from the premises, theft, vehicles, employee injuries, professional services, pollution, cyber exposures, and other coverage may be subject to separate limits, deductibles, exclusions, endorsements, waiting periods, sublimits, or separate policies. All coverage is subject to applicable law and the terms, conditions, definitions, classifications, exclusions, limits, deductibles, endorsements, schedules, and requirements of the issued policy.