Business owners policies (BOPs) are hard to pin down price wise since there are so many factors that go into the cost of the insurance. Depending on the size of your business and the amount of coverage required, you could pay anywhere between $350 and $2,000 a year. On average, businesses pay about $1,200 a year.

Factors that Affect Your BOP

The main factors that affect the cost of your BOP include:

• Location
• Size of the business
• Industry
• Claims history
• Credit score of the insured
• Coverage limits
• Deductible

Different industries will pay different prices for the same coverage due to the nature of the industry. BOPs are generally tailored for small, low-risk businesses. If your industry has a high rate of liability claims, for example, you will likely have to pay higher premiums for liability coverage.

Aspects of your company are also considered when calculating your BOP premiums. Businesses with a long list of claims will pay more for coverage, since they’re likely to file another claim. If you, as the business owner, have a poor credit score, you could also look at paying more for a BOP. Before starting a business, make sure to build your credit by paying off debts and paying bills on time.

Additional Coverage for a BOP

The price of BOPs vary so widely because there are many types of coverage you can add. A basic BOP covers:

• General Liability: General liability insurance covers accidents and acts of non-professional negligence. It can provide compensation for bodily injury and property damage that occurs as a result of everyday business operations.
• Property Insurance: Commercial property insurance covers the physical building owned by the business. It provides compensation if the business’ property is lost or damaged due to fire, smoke, lightning, wind, hail, vandalism and more.

Bundling policies in a BOP can save money compared to purchasing the coverages separately. For general liability alone, most businesses pay an average of $300 to $600 a year. Average businesses pay between $1,000 and $3,000 for every $1 million of commercial property insurance.

But you can also add insurance to your BOP. It allows your business extra protection, but it also means higher premiums. Common additional coverages include:

• Commercial Auto Insurance covers vehicles owned or used by the business for work purposes
• Professional Liability covers claims related to professional negligence.
• Employment Practices Liability covers claims relating to employment practices.