If you run a consulting business, you've probably heard conflicting advice about insurance. Some people swear by Business Owner's Policies (BOPs), while others insist you need separate policies for everything. Here's the truth: there's no one-size-fits-all answer. The right choice depends on your firm's size, what you do, and where you're headed. Let me break down when a BOP makes sense and when you're better off with standalone policies.
What's Actually in a BOP?
A Business Owner's Policy bundles two essential coverages into one package: general liability insurance and commercial property insurance. Think of it as the insurance equivalent of a combo meal—you get multiple things you need at a discount compared to buying them separately.
General liability covers the basics: if a client trips over your laptop bag during a meeting and breaks their wrist, or if you accidentally damage a client's conference room during a presentation, your GL coverage handles the medical bills and repairs. Commercial property insurance protects your business assets—your computers, office furniture, and equipment—whether they're in your office or at a client site.
Many BOPs also include business interruption coverage, which is a lifesaver if something like a fire or flood forces you to shut down temporarily. It covers lost income and ongoing expenses while you get back on your feet. For consulting firms, this might mean covered expenses if your home office becomes unusable or if you can't access client sites due to a covered event.
The Real Cost Difference
Here's where BOPs shine for small consulting firms: bundling saves you money. Industry data from 2026 shows you'll typically save 15-30% by choosing a BOP instead of purchasing general liability and commercial property insurance separately. Some insurers like NEXT automatically discount your premium by 10% when you bundle.
For consulting businesses specifically, the numbers look even better. Marketing and consulting firms fall into the below-average cost category for BOPs—typically under $120 per month, compared to the small business average of $147 monthly. If you're a solo consultant or small firm with minimal equipment, you might pay under $1,000 annually for comprehensive BOP coverage. Compare that to buying general liability alone (averaging $104 monthly) plus commercial property insurance as a separate policy, and the savings become obvious.
The catch? You're still going to need additional policies. A BOP doesn't include professional liability insurance (also called errors and omissions), which protects you if a client claims your advice or work caused them financial harm. For consultants, this is arguably your most important coverage—and it's not in the BOP package. You'll also need workers' compensation if you have employees, and potentially commercial auto insurance if you use vehicles for business.
Do You Even Qualify for a BOP?
Not every consulting business can get a BOP. Insurers typically limit BOPs to businesses with fewer than 100 employees, under $5-6 million in annual revenue, and locations no larger than 35,000 square feet. The good news? Most consulting firms easily meet these requirements.
Consulting is considered a low-risk industry, which works in your favor. Unlike construction companies or manufacturing operations, you're not dealing with heavy machinery or dangerous materials. You're primarily providing advice and expertise, which means lower likelihood of property damage or bodily injury claims. This low-risk profile makes you an attractive candidate for BOP coverage.
That said, eligibility requirements vary between insurance carriers. Some might have stricter revenue limits or industry-specific restrictions. If your consulting firm specializes in high-risk areas—like construction consulting or environmental remediation—some insurers might require standalone policies with higher limits or specialized endorsements.
When a BOP Makes Perfect Sense
A BOP is ideal if you're a solo consultant or small firm with fewer than 20 employees working from a home office or small commercial space. Your business assets are probably limited to laptops, office equipment, and maybe some furniture—nothing that requires sky-high coverage limits. You meet with clients at their locations or via video calls, so your physical liability exposure is minimal.
BOPs also make sense when you're just starting out and want comprehensive coverage without breaking the bank. The bundled pricing gives you solid protection while you're building your client base and revenue. Plus, you can add professional liability insurance as a separate policy to fill that critical gap.
Consider this scenario: you run a marketing consulting firm from your home office with two part-time contractors. Your biggest assets are three laptops worth about $4,000 total. Clients occasionally visit for meetings, but most work happens remotely. A BOP giving you $1 million in general liability coverage and $25,000 in property coverage would likely cost under $100 monthly—and it covers business interruption if something happens to your home office. That's a no-brainer.
When You Need Standalone Policies Instead
Standalone policies make more sense as your consulting firm grows and becomes more complex. If you've got more than 50 employees, annual revenue exceeding $6 million, or multiple office locations, you're likely outgrowing what a standard BOP can handle. At this point, you need the flexibility of a Commercial Package Policy (CPP) that lets you customize coverage limits and add specialized endorsements.
You should also consider standalone policies if your consulting niche requires specialized coverage that BOPs don't offer. For example, if you're a technology consultant working with sensitive client data, you might need cyber liability insurance with limits far exceeding what's available in a BOP. Environmental consultants, engineering consultants, or IT consultants doing hands-on implementation work often need higher professional liability limits than a BOP structure allows.
Client requirements can also push you toward standalone policies. Many large corporations require consultants to carry professional liability coverage with $2 million or higher limits before signing contracts. If your BOP-bundled coverage can't meet those contract requirements, you'll need a standalone professional liability policy with adequate limits. Some clients also require evidence of cyber insurance or other specialized coverages that aren't part of standard BOPs.
Another red flag: if you own expensive equipment or have significant inventory, the property coverage limits in most BOPs might not be enough. A BOP might cap property coverage at $100,000 or less, which won't cut it if you've got a server room full of equipment or specialized consulting tools worth hundreds of thousands.
How to Make the Right Choice
Start by taking inventory of your actual needs. List your business assets and estimate their replacement value. Review your client contracts to see what insurance they require. Calculate your revenue and employee count to confirm you're within BOP eligibility ranges. Then get quotes for both options—a BOP plus separate professional liability versus standalone general liability, commercial property, and professional liability policies.
Don't just compare the bottom-line premiums. Look at coverage limits, deductibles, and exclusions. A cheaper policy isn't a good deal if it leaves critical gaps in your coverage. Work with an insurance agent or broker who specializes in professional services—they'll understand the unique risks consulting firms face and can help you avoid common coverage mistakes.
Remember that your insurance needs will evolve as your consulting business grows. What works perfectly when you're a solo consultant might become inadequate when you hire your fifth employee or land your first Fortune 500 client. Review your coverage annually, and definitely reassess whenever you hit major milestones like hiring employees, signing bigger contracts, or expanding into new consulting specialties. The right insurance strategy today might be the wrong one tomorrow—and that's okay. The key is staying adaptable and making sure you're properly protected at every stage of your business journey.
