If you run an electrical contracting business, you've probably heard the insurance pitch a hundred times: general liability for customer injuries, property insurance for your equipment, business interruption if disaster strikes. But here's what most agents won't tell you upfront—you don't need to buy all those policies separately. A Business Owners Policy, or BOP, packages the essential coverages together and typically saves you 10-15% in the process.
The catch? Not every electrical contractor qualifies for a BOP. There are revenue limits, employee caps, and other restrictions that can disqualify you. Understanding when a BOP makes sense—and what it actually covers—can save you both money and headaches down the road.
What a BOP Actually Covers for Electrical Contractors
Think of a BOP as a starter kit for electrical contractor insurance. It bundles three core coverages into one policy: general liability, commercial property, and business interruption insurance. Instead of juggling three separate policies with three different renewal dates and three sets of paperwork, you get one streamlined package.
General liability is the heavy lifter here. It protects you when a customer trips over your toolbox and breaks an ankle, or when you accidentally damage a client's drywall while running new wiring. Most BOPs for electrical contractors include $1 million per occurrence and $2 million aggregate coverage—enough to handle the majority of claims without breaking a sweat.
Commercial property insurance covers the physical stuff—your shop, your tools, your inventory. If a fire destroys your work van parked at your business location, or thieves break into your storage space and steal $15,000 worth of wire and equipment, this part of your BOP steps in. Many policies include around $5,000 in business property coverage as a baseline, though you can increase that limit if you've got expensive equipment.
Business interruption coverage is the unsung hero of BOPs. Let's say a storm damages your shop and you can't work for three weeks while repairs happen. Business interruption replaces the income you would've earned during that downtime. For electrical contractors who live job-to-job, that safety net can mean the difference between weathering a crisis and closing up shop.
When a BOP Makes Financial Sense
The math on BOPs is pretty straightforward. If you bought general liability and commercial property insurance separately, you'd pay around $113 per month for general liability and another chunk for property coverage. Together, that easily runs $150-200 per month. A BOP for electrical contractors averages $78-166 per month depending on your business size and location. That's real money saved—potentially $500-1,000 per year.
But here's where the eligibility requirements come in. Insurance carriers designed BOPs for small, low-risk businesses. Most insurers require you to have fewer than 100 employees and earn less than $1 million in annual revenue—though some carriers set that revenue cap higher, up to $10 million for certain industries. If you're running a lean operation with a handful of employees and steady but modest revenue, you're in the sweet spot.
There's another wrinkle: the type of work you do matters. Under standard BOP rules, electrical contractors are often subject to restrictions like maintaining annual payroll of $300,000 or less and working at heights no greater than three stories. If you specialize in high-rise commercial work or industrial projects, you'll likely need custom coverage beyond a standard BOP.
Location plays a role too. BOP premiums vary wildly by state—from as low as $117 per month in Alaska to $194 in New York for identical coverage. If you're in a high-cost state, that 10-15% savings becomes even more valuable.
What a BOP Doesn't Cover (And Why That Matters)
Here's where some electrical contractors get tripped up: a BOP is comprehensive, but it's not complete. There are several coverages you'll likely need that don't come bundled in a standard BOP.
Workers' compensation is the big one. If you have employees—even just one—most states legally require workers' comp coverage. It pays medical bills and lost wages if an employee gets hurt on the job. Workers' comp isn't included in BOPs and typically costs electrical contractors a median of $171 per month, or about $3,275 annually. You'll need to buy it separately.
Commercial auto insurance is another gap. Your BOP's property coverage might protect a work van parked at your business location, but it won't cover accidents that happen while you're driving to job sites. If you use vehicles for your electrical business, you'll need commercial auto coverage—budget around $1,700 per year for that.
Professional liability (also called errors and omissions insurance) covers you if a client claims your electrical work was faulty and caused them financial loss. Maybe you designed a lighting system that didn't meet code, and the client had to pay another contractor to redo it. Professional liability handles that claim. Many electrical contractors add this coverage to their insurance package, especially when working on larger commercial projects.
Tools and equipment coverage is sometimes sold separately as well, though some BOPs include it. If you've got $20,000 worth of specialty tools and diagnostic equipment, make sure your BOP's property limits are high enough—or add contractor's tools and equipment insurance, which averages $41 per month.
Building a Complete Insurance Package
For most electrical contractors, the right approach is treating your BOP as the foundation and layering additional coverages on top. A typical complete package might include a BOP, workers' compensation, and professional liability—which together cost around $287 per month or $3,447 annually according to 2025 industry data.
That might sound like a lot, but context matters. Without a BOP, you'd pay $113 per month just for general liability, plus property coverage, plus business interruption—easily reaching $200+ per month before adding any other policies. The BOP discount keeps your total insurance costs manageable.
Keep in mind that your actual costs depend on several factors: your location, your revenue and payroll, the number of employees, your claims history, and even your credit score. Electrical contractors with excellent credit can receive discounts of 13-38% compared to those with credit difficulties. Similarly, a clean claims history signals to insurers that you run a safe operation, which can translate to lower premiums.
How to Get Started with a BOP
If you're sold on the idea of a BOP, the next step is shopping around. Don't just accept the first quote you get—premiums vary significantly between carriers, and what one insurer charges $166 per month for, another might offer at $78.
When comparing quotes, pay attention to the coverage limits. A cheap policy with low limits might leave you exposed if a major claim happens. Make sure you're comparing apples to apples—same liability limits, same property coverage, same deductibles. Many commercial clients require electrical contractors to carry at least $1 million in general liability coverage, and some demand $2 million or higher.
Ask potential insurers about eligibility upfront. If your revenue exceeds $1 million, confirm they can still offer BOP coverage or if you'll need a customized commercial package instead. Same goes if you work on projects taller than three stories or have a large payroll—better to know now than after you've spent time gathering quotes.
Finally, review your BOP annually. As your business grows, your insurance needs change. Maybe you hire more employees and need to bump up your workers' comp. Maybe you invest in expensive new equipment and need higher property limits. Your BOP should evolve with your business, not stay static year after year. A policy that made sense when you started might leave gaps as you expand—or you might be paying for coverage you no longer need.
