To customize a Business Owner's Policy (BOP), match each of your client's exposures to one of three tools: an endorsement, a limit change, or a separate policy. Start with how the business makes money, what it owns, and what its lease demands, then set values and limits last.
The question usually arrives mid-quote. A lease requires additional insured status for the landlord, or a restaurant owner mentions the walk-in cooler died last summer. The sequence below works for any class, and one neighborhood restaurant shows it end to end.
Key Takeaways
Three tools do the work: endorsements, limits and sublimits, and separate policies.
Ask exposure questions in order: property, off-premises liability, contracts, and data.
Document anything the owner declines, and rerun the review at every operational change.
What Does It Mean to Customize a BOP?
A BOP packages commercial property and general liability into one policy for eligible small businesses. The Insurance Information Institute (Triple-I) says companies with 100 or fewer employees and revenue up to about $5 million are normally BOP candidates, and that more coverage can be added by endorsement.
Customizing means working three levers:
Endorsements, which add or broaden coverage the base form leaves out.
Limits and sublimits, set to the client's actual values and recovery time.
Separate policies, for exposures a BOP isn't built to hold.
For the full rundown of exclusions, see what a BOP does and doesn't cover. If you're still deciding whether a BOP fits at all, start with BOP vs. general liability.
How Do You Match Each Exposure to the Right Endorsement?
Begin with how the client makes money. Ask what they own and depend on, who drives for them, who they employ, what they've signed, and what data they hold. Each answer points to a group of coverages.
Property the Client Depends On
Equipment breakdown comes first for any client that relies on refrigeration, HVAC, ovens, or a point-of-sale (POS) system. IRMI (International Risk Management Institute) is direct about the gap: "Standard commercial property policies do not provide equipment breakdown coverage." Some BOP forms build it in and others add it by endorsement, so read the form.
Spoilage coverage pays for perishable stock lost when refrigeration fails or the power goes out. Utility service interruption goes further, covering the income lost when an outage starts off the premises, and IRMI notes it's available by endorsement from some carriers.
For older buildings, raise ordinance or law coverage. Per IRMI, unendorsed property forms don't pay to bring a building up to current code after a loss.
Liability That Follows the Client off the Premises
Ask who runs errands in a personal car. Standard liability forms exclude autos, and hired and non-owned auto (HNOA) liability fills that gap for vehicles the business doesn't own. IRMI says the coverage does vary by insurer.
Then ask about headcount and turnover. Employment practices liability insurance (EPLI) covers wrongful acts arising from the employment process. The U.S. Equal Employment Opportunity Commission (EEOC) processed 88,201 new discrimination charges in fiscal year 2025. Depending on the carrier, EPLI may be available on the BOP or only as a separate policy.
What the Lease and Contracts Demand
Read the lease and any vendor or franchise agreements before you quote. An additional insured endorsement is used to add coverage for additional insureds by name, and some versions are restrictive, so match the wording to the contract.
A waiver of subrogation is a separate tool. It means the insurer has no right to subrogate against a liable third party. Check whether the lease asks for both, and confirm the carrier can provide them before you quote.
Data the Client Holds
Ask whether the client takes card payments, emails invoices, or stores customer records. A yes to any of them is a cyber exposure. The FBI's Internet Crime Complaint Center (IC3) logged $20.877 billion in reported losses in 2025, across individuals and businesses.
When Is an Endorsement Enough, and When Does the Client Need a Separate Policy?
An endorsement keeps coverage on one policy, with one renewal date and one set of declarations. That simplicity costs breadth: an endorsement can be narrower than a dedicated policy and may carry its own sublimits.
Cyber is the clearest case. Coverage on the BOP can fit a client with light exposure, such as a small office with few stored records. A client with heavy card volume, years of customer data, or daily dependence on its systems needs a standalone cyber conversation. Verizon found ransomware in 88% of breaches at small and midsize businesses.
Workers' compensation and owned autos always go on their own policies. Professional liability usually does too, though some carriers offer it on the BOP for certain classes.
A business can also outgrow the BOP. IRMI describes commercial package policies as serving businesses not eligible for the BOP program due to size or type of operations. Whether a BOP costs less than separate policies depends on class, location, values, limits, and loss history.
Building the Stack for a Neighborhood Restaurant
Take a 40-seat restaurant in a leased strip-center space. It runs a walk-in cooler and reach-ins, takes cards through a POS system, and sells takeout through third-party delivery apps. The manager makes the daily bank deposit in a personal car.
Start with the lease. The landlord wants to be named as an additional insured, so that goes on the file. If the lease also asks for a waiver of subrogation, confirm the carrier can provide one before you quote.
The cooler drives equipment breakdown and spoilage. Look for a restaurant endorsement package too, which on many BOPs adds food contamination and broader spoilage coverage.
The bank run is an HNOA exposure, because the manager's personal auto policy may not respond to a business errand. If the restaurant runs its own delivery with employees' cars, say so on the application, since carriers ask about it.
Card data is a cyber exposure. Check whether the BOP includes cyber coverage, and have a standalone cyber conversation if card volume is heavy. Workers' compensation goes on its own policy.
Set the numbers last. Stock values should reflect the cooler on its fullest day, and the business income period should match a realistic kitchen rebuild.
Document anything the owner declines, in writing. That record protects you if a loss lands in the gap, and it opens the next renewal conversation. Recheck the stack at every trigger: a new location, a new lease, in-house delivery, or new kitchen equipment.
How Do You Keep Customization From Eating Your Day?
A full exposure review on a small BOP takes nearly as much discovery as a larger account, for a fraction of the commission. The fix is less time on the file and more on the exposures.
MGT Insurance, the first AI-native neo-insurer for small commercial property and casualty, built from the ground up for independent agents, builds its BOP on the ISO BOP form and fits it to the class with optional coverages. On MGT's BOP:
Cyber liability is included automatically.
Employment practices liability (EPLI) is optional in most states.
Equipment breakdown and spoilage are optional, with spoilage available for food, grocery, florist, and pharmacy businesses.
Restaurants get a restaurant endorsement package, plus hired and non-owned auto on eligible classes in most states.
Additional insureds can be listed for each location.
Two common requests aren't available as options on MGT's BOP today: utility service interruption and waiver of subrogation. If a lease requires a waiver, ask your MGT underwriter before you quote.
Check fit on MGT's appetite page or with Aimee, MGT's quoting and appetite agent, and quote in chat if you work in ChatGPT or Claude. A quote starts from basic business details. The platform gathers third-party data, pre-fills routine details, and checks classification against appetite, so the agent's attention goes to the details that shape the risk. A real underwriter stays in the loop for judgment calls, such as re-classing a business or raising a limit.
MGT doesn't write workers' compensation, commercial auto, flood, or earthquake. For optional coverages by class, see the coverage guide and available endorsements.
Ready to Build Your Next BOP?
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Business owner? Work with an independent agent. MGT distributes exclusively through independent agents.
Final Takeaway
Customization is a sequence you rerun every time the client's operation changes. Pick one account with a renewal trigger this quarter and walk it through exposure, endorsement, limit, and separate policy again.
BOP Customization FAQ
How do you add cyber liability to a BOP?
Some BOPs include cyber coverage automatically, including MGT's, so check the form first. For heavy card volume or large stores of customer records, place a standalone cyber policy as well.
Does a BOP cover equipment breakdown?
Standard commercial property forms don't, according to IRMI, so equipment breakdown is usually added by endorsement unless the BOP form builds it in. On MGT's BOP, it's an optional coverage.
What endorsements does a restaurant BOP usually need?
A leased restaurant with coolers, card payments, and staff errands typically needs equipment breakdown, spoilage, food contamination, hired and non-owned auto, and additional insured status for the landlord. Add liquor liability if the restaurant serves alcohol.
Can bundling small business insurance policies save money?
A BOP is already the bundle, packaging property and general liability into one policy. Any savings come down to the specific risk, so a real quote through an independent agent is the only reliable answer.
When should a client move from a BOP to a commercial package policy?
Move the client when size or type of operations falls outside BOP eligibility, which IRMI identifies as the point where package policies take over. The exposure questions stay the same on the new policy.
Does MGT offer hired and non-owned auto on its BOP?
Yes. MGT offers hired and non-owned auto on eligible classes in most states, including restaurants. Restaurants are asked whether they deliver with their own employees, so have that answer ready before you quote.
This content is for informational purposes only and does not guarantee coverage under any insurance policy. Actual coverage, terms, and exclusions are governed by the specific policy issued and may vary by state, carrier, and individual circumstances. Please review your policy documents or consult with your agent for guidance specific to your situation.
