If you run an HVAC business, you already know that insurance can feel like a maze of confusing options and overlapping coverage. Should you buy general liability? Property insurance? Both? And why are there so many different policies to choose from? Here's where a Business Owners Policy (BOP) comes in—it's designed to simplify things by bundling the essential coverages most HVAC contractors need into one convenient package.
Think of a BOP as the insurance equivalent of a combo meal—you get multiple coverages together for less than you'd pay buying them separately. For HVAC contractors, this typically means general liability insurance (protecting you from customer injury or property damage claims) plus commercial property coverage (protecting your tools, equipment, and business property) in one policy. The best part? You'll usually save 10-15% compared to purchasing these coverages individually.
What's Actually Included in a BOP?
A Business Owners Policy combines three core coverages that most HVAC contractors need. First, there's general liability insurance. This is your protection when a customer claims you damaged their property or caused an injury. Imagine you're installing a new furnace and accidentally crack a customer's tile floor, or someone trips over your equipment and breaks their wrist. General liability handles the medical bills, repair costs, and legal fees if you get sued.
Second, you get commercial property insurance. This covers your physical assets—your shop, office equipment, inventory of parts, and all those expensive tools you've accumulated over the years. If your van gets broken into and thieves steal $15,000 worth of tools, or a fire damages your office, commercial property insurance steps in to replace what you lost.
The third piece is business interruption coverage, and this one's easy to overlook until you need it. If a covered event—like that fire or theft—forces you to temporarily shut down, business interruption insurance replaces the income you're losing while you get back on your feet. It can also cover ongoing expenses like rent and payroll so you don't go under while you're rebuilding.
When Does a BOP Make Sense for HVAC Contractors?
BOPs are specifically designed for small to mid-sized businesses that are relatively low-risk. If you're a solo HVAC tech or you run a small shop with a handful of employees, a BOP is probably perfect for you. Insurance companies typically recommend BOPs for businesses that fit this profile rather than larger commercial operations.
The sweet spot for a BOP is when you have property to protect and face liability risks from your work. If you own or rent a shop, store inventory and equipment there, and regularly work in customers' homes or businesses, you need both property and liability coverage—making a BOP an efficient choice. You're getting comprehensive protection in one policy without the hassle of managing multiple insurance carriers and renewal dates.
That said, there are situations where a BOP might not be the right fit. If you're a larger HVAC company with higher revenue or more complex risks, you might need a Commercial Package Policy (CPP) instead. CPPs offer more flexibility and customization options than BOPs, though they typically cost more. Similarly, if you only need one type of coverage—say you work out of your home and don't have business property to insure—buying standalone general liability might be cheaper than a BOP.
What You'll Actually Pay for a BOP
The average HVAC contractor pays somewhere between $124 and $141 per month for a Business Owners Policy, which works out to roughly $1,500-$1,700 per year. But here's the catch: that's just an average, and your actual cost could be significantly higher or lower depending on several factors.
Your location makes a huge difference. The same BOP that costs $311 per month in North Dakota might run you $422 in New York. Your revenue matters too—insurance companies know that businesses making more money typically face bigger claims, so premiums scale up as your revenue grows. As a general rule of thumb, expect to pay somewhere between 1.3% and 2.6% of your annual revenue for general liability coverage alone (which is just one component of your BOP).
Other factors that influence your BOP cost include your claims history, the value of property and equipment you need to insure, the number of employees you have, and the specific services you offer. Commercial refrigeration work might be priced differently than residential furnace installation, for example.
What a BOP Doesn't Cover
Here's where HVAC contractors sometimes get tripped up: a BOP doesn't include everything you need. Most importantly, it doesn't include workers' compensation insurance, which is legally required in most states if you have employees. Workers' comp covers medical bills and lost wages if an employee gets injured on the job—and trust me, you don't want to skip this coverage. The fines for operating without required workers' comp can be severe.
You also won't get commercial auto insurance in a standard BOP. If you or your employees drive company vehicles—or even your personal vehicle for business purposes—you need separate commercial auto coverage. A lot of HVAC contractors miss this one, assuming their personal auto policy covers them while they're working. It usually doesn't.
Finally, professional liability insurance (also called errors and omissions insurance) typically isn't included either. This covers you if a client claims your work was faulty or you made a professional error that cost them money. Some contracts, especially with commercial clients, may require you to carry this coverage separately.
How to Get Started with a BOP
Shopping for a BOP is pretty straightforward. Start by gathering some basic information about your business: your annual revenue, number of employees, the value of your equipment and property, your business address, and details about the services you offer. Having this information ready will speed up the quote process.
Get quotes from multiple insurers—don't just go with the first one you find. Prices can vary significantly between carriers, even for identical coverage. Look for insurers that specialize in contractor coverage or have experience with HVAC businesses specifically. They'll better understand your unique risks and may offer better rates or more tailored coverage options.
When you're reviewing quotes, don't just look at the premium—check what coverage limits you're getting, what the deductibles are, and what exclusions apply. A cheaper policy with low limits might end up costing you more if you actually need to file a claim. And remember to ask about the additional coverages you'll need beyond the BOP, like workers' comp and commercial auto, so you can budget for your complete insurance program.
For most small to mid-sized HVAC contractors, a Business Owners Policy is one of the smartest insurance decisions you can make. You're getting comprehensive protection for both your property and your liability exposures in one convenient, cost-effective package. Just make sure you understand what's included, what's not, and what additional coverages you need to stay fully protected. Taking the time to get the right coverage now means you can focus on growing your business instead of worrying about what might go wrong.
