Glossary · Insurance agency commissions
Businessowners policy (BOP)
A businessowners policy (BOP) is a package policy for small and mid-size businesses that combines property, liability and business interruption coverage under one premium, without workers’ compensation or commercial auto.
What it means
The NAIC glossary defines a business owners policy as “business insurance typically for property, liability, and business interruption coverage.” Triple-I’s guide to home-based businesses says a BOP was “created specifically for small-to-mid-size businesses” and covers “business property and equipment, loss of income, extra expense and liability.” Its note on saving money calls it a package policy that “provides standard coverages and limits of liability.”
Larger or unusual risks that don’t fit a BOP usually go on a commercial package policy instead.
How it shows on a commission statement
A BOP usually pays as one line per transaction, like a personal lines policy: new business, renewal, endorsements, cancellations. It is often direct billed on smaller accounts. Because property and liability share one premium, there is no separate rate per coverage to check, only the one the carrier pays for the BOP. Endorsements adding a location or equipment change the premium mid-term; our guide on commission on mid-term endorsements covers the check. Some BOPs include liability rated on sales or payroll and are audited; see commission on premium audits.
Example
| Policy | Transaction | Premium | Rate | Commission |
|---|---|---|---|---|
| EX-66301 | Renewal | 3,200.00 | 15% | 480.00 |
| EX-66301 | Endorsement (second location) | 640.00 | 12% | 76.80 |
| Total | 3,840.00 | 556.80 |
The endorsement was paid at a different rate from the policy it changes. That is worth a question unless your schedule says so. Commission rates on this page are invented; your agency agreement and commission schedule set the real ones.
Common mistakes to check
- Looking for workers’ comp or commercial auto inside the BOP; they are separate policies with separate lines.
- Accepting a different rate on a BOP endorsement than on the policy without checking the schedule.
- Missing a BOP renewal because it rolled to a new policy number.
Questions
What does a BOP cover?
Property, liability and business interruption for small and mid-size businesses, in one policy. Workers’ comp and commercial auto are bought separately.
How is commission paid on a BOP?
Usually as one line per transaction at the rate the carrier pays for the BOP, often on a direct bill statement. Check endorsement lines against the same rate.
What is the difference between a BOP and a commercial package policy?
A BOP is a standard bundle for smaller businesses; a commercial package policy is built from separate coverage parts for businesses a BOP doesn’t fit.
Sources
- National Association of Insurance Commissioners, Glossary of Insurance Terms, entry for business owners policy. Retrieved October 14, 2026.
- Triple-I (Insurance Information Institute), Insuring Your Home-based Business. Retrieved October 14, 2026.
- Triple-I (Insurance Information Institute), How can I save money on my business insurance?. Retrieved October 14, 2026.
Lapidar is commission reconciliation software for independent insurance agencies, in its founding pilot. Related: commercial package policy.