If you run a home remodeling business, you've probably been told you need general liability insurance. And commercial property coverage. Maybe business interruption protection too. The thought of juggling multiple policies, multiple bills, and multiple renewal dates is enough to make anyone's head spin. That's where a business owners policy—or BOP—comes in. It bundles your essential coverages into one neat package, often at a lower price than buying everything separately.
But here's the thing: BOPs aren't for everyone. They come with revenue limits, employee caps, and some notable coverage gaps that matter for contractors. Let's break down when a BOP makes sense for your home remodeling business—and what you might need beyond it.
What Exactly Is a Business Owners Policy?
A business owners policy combines two foundational types of business insurance: general liability and commercial property coverage. Think of it as a starter pack for protecting your remodeling company. General liability handles lawsuits when a customer trips over your equipment or you accidentally damage someone's home during a renovation. Commercial property coverage protects your tools, office equipment, and business location from theft, fire, and vandalism.
Most BOPs also include business interruption insurance, which reimburses you for lost income if a covered event—like a fire at your office—forces you to temporarily stop working. For a home remodeling contractor who might store expensive power tools and materials, this bundled protection can be a smart move.
The biggest selling point? Cost savings. Insurance industry data shows that purchasing a BOP typically costs about 10% less than buying general liability and property coverage as separate policies. Some contractors report savings of several hundred dollars annually by bundling.
Does Your Remodeling Business Qualify for a BOP?
BOPs are designed for small to medium-sized businesses with relatively low risk profiles. That said, many home remodeling contractors do qualify. Here are the typical eligibility requirements you'll encounter:
Revenue limits usually cap between $1 million and $6 million annually, depending on your insurer. The current ISO businessowners rules limit eligibility to firms with no more than $6 million in gross annual sales. Employee counts typically need to stay under 100, with some micro-BOP programs requiring four or fewer employees. Your premises can't exceed 35,000 square feet, though this rarely affects most remodeling contractors working from home offices or small commercial spaces.
Some insurers impose additional restrictions on contractors specifically. Common caps include annual payroll under $300,000 and no work performed at heights exceeding three stories. Heavy construction and demolition contractors typically won't qualify, but residential remodelers, electricians, plumbers, and carpenters often do.
If your business exceeds these limits, you'll need a commercial package policy (CPP) instead. CPPs offer more flexibility and higher limits but require more customization.
What's Typically Included in a Contractor BOP?
While specific coverages vary by insurer, most BOPs for home remodeling contractors include these core protections:
General liability insurance protects you when third parties sue for bodily injury or property damage. If a homeowner claims your crew damaged their hardwood floors during a kitchen remodel, this coverage handles your legal defense and any settlement or judgment. Typical limits are $1 million per occurrence and $2 million aggregate—the amounts 97% of contractors choose.
Commercial property insurance covers your business property against fire, theft, vandalism, and other covered perils. This includes your office building (if you own it), improvements you've made to a rented space, equipment, inventory, and signage. Some insurers offer specialized contractor's tools and equipment endorsements covering newer hand tools and equipment valued under $10,000.
Business interruption coverage kicks in when a covered loss forces you to stop operations. If a fire damages your office and you can't work for two months, this coverage reimburses your lost income and ongoing expenses like loan payments.
What a BOP Won't Cover
Here's where things get tricky for home remodeling contractors. BOPs have significant gaps that can leave you exposed if you're not careful.
Workers' compensation is not included in any BOP. If you have employees—and most states require workers' comp once you hire even one person—you'll need a separate policy. This is non-negotiable for remodeling contractors given the physical nature of the work.
Commercial auto insurance must also be purchased separately. Your personal auto policy won't cover accidents that happen while you're driving to job sites with equipment in your truck. Any vehicle used for business purposes needs commercial coverage.
Professional liability (also called errors and omissions) isn't part of a standard BOP. If you provide design services or consulting along with your remodeling work, you may need this additional coverage.
Natural disaster coverage is another gap. Floods, earthquakes, and sometimes hurricanes and tornadoes are excluded from standard BOPs. If you operate in areas prone to these events, you'll need separate policies or endorsements.
Perhaps most concerning for remodeling contractors: some BOPs include exclusions for subcontractor work or claims arising from construction projects. Always review your policy language carefully. An exclusion that voids coverage for claims arising from remodeling projects would obviously defeat the purpose of the policy.
How Much Does a BOP Cost for Home Remodelers?
Construction and contracting businesses typically pay between $98 and $200 per month for a BOP, depending on several factors. For home remodeling contractors specifically, expect to budget somewhere in the $100 to $175 range monthly, or roughly $1,200 to $2,100 annually.
Your actual premium depends on your location (urban areas and states with higher claim rates cost more), annual revenue and payroll (higher numbers mean higher premiums), the value of property and equipment you're insuring, your claims history, and the specific coverage limits you choose.
Some insurers advertise BOPs starting as low as $25 per month, but those rock-bottom prices typically apply to very low-risk businesses with minimal coverage needs—not active construction contractors. Get quotes from multiple carriers to find realistic pricing for your specific situation.
How to Get the Right BOP for Your Business
Start by checking if you actually qualify. Contact several insurers—including The Hartford, Liberty Mutual, Nationwide, and specialty contractors' insurers like Markel—to compare eligibility requirements and pricing. Some carriers have developed specific residential remodeling programs that understand your industry's unique risks.
Ask about exclusions explicitly. Request a sample policy or ask the agent to walk through what's not covered. Pay special attention to any subcontractor exclusions or construction project limitations.
Consider bundling beyond the BOP. Many insurers offer multi-policy discounts when you add workers' compensation or commercial auto through the same carrier. This can offset some of the cost of these required additional coverages while simplifying your insurance management.
Review coverage annually. As your remodeling business grows, you may eventually outgrow BOP eligibility. That's actually a good problem to have—it means you're succeeding. When that happens, work with your agent to transition to a commercial package policy that can scale with your business.
A business owners policy can be an excellent foundation for protecting your home remodeling business—as long as you understand what it covers and what it doesn't. Pair it with the additional coverages you need, review your policy carefully for contractor-specific exclusions, and you'll have a solid insurance foundation that lets you focus on what you do best: transforming people's homes.
