If you run an IT consulting firm, manage cloud infrastructure for clients, or develop custom software, you've probably heard you need a Business Owners Policy. But here's what most technology services companies don't realize: a standard BOP covers less than half of what you actually need. The good news? When you understand what a BOP does cover—and what you'll need to add—you can build surprisingly affordable protection for your tech business.
Think of a BOP as the foundation of your insurance strategy. It handles the basics every business needs, then you layer on the specialized coverages that protect against the unique risks IT companies face every day.
What's Actually in a Business Owners Policy
A BOP bundles three core coverages into one policy: general liability insurance, commercial property insurance, and business interruption coverage. That's it. Nothing more, nothing less—though insurers will let you add endorsements for additional protection.
General liability handles third-party bodily injury and property damage. If a client trips over your laptop bag during an on-site consultation and breaks their wrist, that's covered. If you accidentally damage a client's server rack while installing equipment, your BOP pays for repairs. This coverage typically includes $1 million per occurrence and $2 million aggregate.
Commercial property coverage protects your physical business assets—computers, servers, office furniture, and the building itself if you own it. For most IT consultants working from home offices, this means coverage for your equipment and any inventory you keep on hand. The property portion adjusts based on the value of what you own, which directly affects your premium.
Business interruption coverage kicks in when a covered event forces you to temporarily close. If a fire damages your office and you can't work for three weeks, this coverage replaces lost income and pays ongoing expenses like rent and payroll. For IT services companies that can work remotely, this matters less than for retail businesses, but it's still valuable protection.
Does Your IT Business Qualify for a BOP
Insurance carriers designed BOPs for small to medium-sized businesses in low-risk industries. Most insurers use these thresholds: fewer than 100 employees, annual revenue under $5 million, and a modest physical footprint. Some carriers set more conservative limits at $1 million in revenue, so check with multiple providers if you're near that line.
Technology services companies generally qualify because insurers consider them low-risk compared to manufacturing or construction. IT consultants, software developers, web designers, and managed service providers all typically fit BOP eligibility criteria. The exception: if you manufacture hardware or run a large data center, you'll likely need a Commercial Package Policy instead.
Your business structure doesn't matter for BOP eligibility. Sole proprietors, LLCs, and S-corps all qualify equally. What matters is your industry classification, revenue, employee count, and risk profile.
What You'll Actually Pay
In 2025, the average BOP costs between $67 and $147 per month depending on your specific situation and location. IT consultants working from home offices typically pay toward the lower end—around $50-$80 monthly—because they have minimal property to insure and operate in low-risk environments.
Here's where the savings kick in: bundling general liability and property coverage in a BOP saves you 10-15% compared to buying separate policies. Some sources report savings up to 25%. If you paid for these coverages individually, you'd spend roughly $194 more per year based on 2024 data. That's not life-changing money, but it's real savings for small businesses watching every dollar.
Your premium depends on several factors: the value of your equipment and property, your location, your claims history, and your annual revenue. An IT consultant with $20,000 in equipment working from a home office in Ohio will pay significantly less than a 15-person software development firm with $200,000 in servers leasing office space in San Francisco.
The Coverage Gaps Every IT Company Needs to Fill
This is critical: a standard BOP doesn't include professional liability insurance or cyber liability insurance. For technology services companies, that's a massive problem because those are the two coverages you'll most likely use.
Professional liability—also called Errors and Omissions or Tech E&O—protects you when your services fail to deliver promised results and a client loses money. If you deploy software with a bug that crashes a client's e-commerce site during Black Friday, costing them $50,000 in lost sales, your BOP won't help. You need professional liability for that. Most IT consultants pay $85-$115 monthly for this coverage, with an average around $98 per month in 2025.
Cyber liability insurance covers data breach response costs, ransomware attacks, and network security failures. If hackers breach your systems and steal client data, you're looking at notification costs, credit monitoring for affected individuals, legal fees, regulatory fines, and potential lawsuits. These costs routinely hit six figures. The average cyber policy costs about $145 monthly for $1 million in coverage, though technology consultants often bundle it with E&O for $1,500-$2,500 annually.
You can sometimes add cyber coverage to your BOP as an endorsement, which is simpler than buying a standalone policy. However, BOP endorsements typically max out around $25,000-$100,000 in cyber coverage. For most IT businesses handling sensitive data, that's not nearly enough. You'll want a dedicated cyber policy with higher limits.
When a BOP Makes Sense for Your Tech Business
A BOP makes excellent sense for small IT services companies that need basic liability and property protection without complexity. If you're a solo consultant, a small development shop with 5-10 employees, or a managed services provider with under $3 million in revenue, a BOP gives you solid foundational coverage at a reasonable price.
The bundled approach shines when you want administrative simplicity. One policy, one renewal date, one carrier to deal with. You're not juggling multiple policies from different insurers, which saves time and reduces the chance you'll let something lapse.
However, don't stop at just the BOP. Layer professional liability and cyber coverage on top of it. Think of insurance like network security: defense in depth. Your BOP is the firewall, but you still need endpoint protection and intrusion detection. Same principle.
Once your business grows beyond 100 employees or $5 million in revenue, you'll transition to a Commercial Package Policy. CPPs offer higher coverage limits, more customization options, and the flexibility to add specialized endorsements. It's not better or worse than a BOP—it's just designed for larger operations with more complex needs.
How to Get Started
Start by getting quotes from multiple carriers that specialize in business insurance. The Hartford, Progressive Commercial, NEXT, and Hiscox all offer competitive BOP rates for technology companies. Don't just compare the base BOP price—look at what it costs to add professional liability and cyber coverage through the same carrier.
When you request quotes, have this information ready: your annual revenue, number of employees, value of equipment and property, detailed description of services you provide, and whether you store customer data. Accurate answers help carriers price your risk correctly and prevent unpleasant surprises at renewal.
Read your policy documents carefully, especially the exclusions section. Make sure you understand exactly what triggers coverage and what doesn't. If contract language confuses you, that's normal—ask your agent to explain specific provisions in plain English.
A Business Owners Policy won't solve all your insurance needs, but it's the right starting point for most IT services companies. Bundle it with professional liability and cyber coverage, and you've built a solid insurance program that protects against the risks that actually threaten technology businesses. Get quotes, compare your options, and put protection in place before you need it.
