If you run an engineering firm, you've probably heard different advice about business insurance. Some people tell you to buy general liability and property coverage separately. Others swear by something called a Business Owners Policy, or BOP. Here's the truth: a BOP can save you money and simplify your coverage, but it's not a complete solution for engineering firms. Let's break down when it makes sense and what you need to know.
Think of a BOP as a bundled package. Instead of shopping for general liability insurance, property insurance, and business interruption coverage separately, you get all three in one policy. For many engineering firms, this means less paperwork, one renewal date to remember, and typically 10-15% savings compared to buying each policy individually. But there's a catch: BOPs have eligibility requirements, and they don't cover everything an engineering firm needs.
What's Actually Included in a BOP
A standard BOP combines three types of coverage that most engineering firms need. First, there's general liability insurance. This protects you if a client or visitor gets injured at your office, or if you accidentally damage someone's property during a site visit. Say you're conducting a site inspection and knock over expensive equipment—that's covered. Or imagine a client trips over cables in your conference room and breaks their wrist. General liability handles the medical bills and potential lawsuit.
Second, you get commercial property insurance covering your physical office space, equipment, furniture, and supplies. This matters more than you might think. Your computers, specialized software, drafting equipment, reference libraries, and office furniture represent a significant investment. If a fire, theft, or storm damages your office, property coverage replaces those assets so you can get back to work. Most BOPs provide around $5,000 in basic property coverage, though you can increase this limit based on what you actually own.
Third, business interruption coverage is the part people often overlook but desperately need when disaster strikes. If your office becomes unusable due to a covered event, this coverage replaces the income you lose while you're shut down. It also covers ongoing expenses like rent and payroll that don't stop just because you can't work from your normal location. For engineering firms with tight project deadlines and client commitments, this can be the difference between a temporary setback and a business-ending crisis.
Do You Qualify for a BOP?
Insurance companies set specific requirements for BOP eligibility, and engineering firms need to meet these criteria to qualify. The two big ones are revenue and employee count. Most insurers require your annual revenue to stay under $1 million and your headcount to remain below 100 employees. If you're a smaller engineering consultancy or specialized firm, you likely qualify. Larger firms with substantial revenue or bigger teams will need to look at commercial package policies instead.
The type of work you do also matters. Engineering firms are generally considered professional services, which insurers view as relatively low-risk compared to manufacturing or construction. This works in your favor for BOP eligibility. However, if your firm does unusually high-risk work or operates in specialized areas, you might face restrictions. Some insurers also consider whether you maintain a physical office versus working entirely remotely, though most BOPs assume you have some commercial space to insure.
What You'll Actually Pay
Engineering firms typically pay around $49 per month for BOP coverage, according to 2026 data. That's roughly $588 per year. But this is just an average—your actual cost depends on several factors. Your location matters significantly. Engineering firms in states with higher litigation rates or natural disaster risks pay more. Your revenue, the number of employees, your claims history, and the specific coverage limits you choose all affect your premium.
To put this in perspective, if you bought general liability and commercial property insurance separately, you'd likely pay more. Small businesses report paying an average of $104 monthly for general liability alone. When you add property coverage, you're easily over $150 per month total. That's where the 10-15% savings from bundling becomes real money—potentially $600 to $900 saved annually just by choosing a BOP instead of separate policies.
The Big Thing a BOP Doesn't Cover
Here's where many engineering firms get tripped up: a BOP does not include professional liability insurance, also called errors and omissions coverage. This is arguably the most important coverage for engineering work. Professional liability protects you when clients claim your designs, calculations, recommendations, or professional advice caused them financial harm. If you make a mistake in structural calculations that leads to costly rework, or if a client alleges your design omission resulted in project delays, professional liability coverage handles the defense costs and potential settlement.
Why isn't this included in a BOP? Because professional liability works differently than general liability. It's claims-made coverage, meaning it only covers claims made while the policy is active, regardless of when the alleged error occurred. It also requires specialized underwriting based on your specific engineering discipline, project types, and professional credentials. Most engineering firms need professional liability limits ranging from $1 million to $5 million per claim. You can often add this as an endorsement to your BOP, or you may need to buy it separately. Either way, don't skip it—many clients require proof of professional liability before they'll hire you.
Common Exclusions and Gaps to Know About
Beyond professional liability, BOPs have other standard exclusions that engineering firms should understand. Cyber liability isn't covered, which matters if you store client data, project files, or sensitive information electronically. A data breach or ransomware attack could cost tens of thousands to resolve, and your BOP won't help. You'll need a separate cyber liability policy for that protection.
If your engineers travel to job sites regularly or use company vehicles for business purposes, you need commercial auto insurance. BOPs don't cover vehicle-related incidents. Employee injuries are also excluded—that's what workers' compensation insurance is for, and it's required by law in most states once you have employees. Employment practices liability, which covers discrimination or wrongful termination claims, is another separate policy you might need as you grow.
How to Get the Right Coverage for Your Firm
Start by assessing your actual risks. Do you maintain a physical office with equipment and furniture worth protecting? Do clients visit your location? Do you conduct site inspections where you could accidentally cause property damage? If yes to these questions, a BOP makes sense as your foundation coverage. Then layer on the engineering-specific protection you need, starting with professional liability.
When you're getting quotes, ask specifically about adding professional liability as an endorsement to your BOP. Some insurers offer this as a package, which can simplify billing and renewals. Also ask about your actual coverage limits—the standard $5,000 property coverage might not be enough if you have expensive equipment. Review the business interruption limits too, making sure they'd actually cover your expenses if you couldn't access your office for several weeks.
Compare quotes from at least three insurers who specialize in coverage for professional services firms. The cheapest option isn't always the best—look at what's actually covered, the exclusions, the claims process reputation, and whether the insurer understands engineering firms specifically. Review your coverage annually as your firm grows, because once you exceed those revenue or employee thresholds, you'll need to transition to different coverage options. The right insurance protects the business you've built and lets you focus on the engineering work you do best.
