The cost of a business owners policy (BOP) varies widely depending on several different factors. On average, you could pay around $1,200 a year. The range often falls between $350 and $2,000 a year, however.

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

Industry

Your business’ industry is one of the key components to how much you may pay for a BOP. 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.

Credit Score

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

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.

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.

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.

Lawsuits can often put companies out of business, especially in the starting years of operation.

Ask an insurance agent about how you can save on your business owners policy without sacrificing the coverage your business needs. Every business is different and you should have a policy geared to cover your business’ unique risks.