If you run an electrical contracting business, you've probably heard about Business Owner's Policies and wondered whether bundling your insurance makes sense—or if you're better off buying general liability and property coverage separately. Here's the thing: there's no one-size-fits-all answer. The right choice depends on your business size, the type of work you do, and where you operate. Let's break down when a BOP saves you money and hassle, and when standalone policies give you the coverage and flexibility you actually need.
What's Actually in a BOP?
A Business Owner's Policy is essentially a package deal. Instead of shopping for general liability insurance and commercial property insurance separately, you get both in one policy—often with business interruption coverage thrown in as a bonus. For electrical contractors, this typically means:
General liability coverage protects you if someone gets injured on a job site or you accidentally damage a client's property while installing wiring. Commercial property coverage handles your tools, equipment, and office space if they're damaged by fire, theft, or weather. Business interruption coverage kicks in if a covered event—like a fire at your shop—forces you to temporarily shut down, reimbursing lost income and helping with relocation costs.
Most BOPs for electrical contractors come with standard limits of $1 million per occurrence and $2 million aggregate for general liability, plus around $5,000 in business property coverage. Some insurers also include extras like tools and equipment coverage, completed operations protection, and installation floaters—which are especially useful if you're installing expensive electrical panels or lighting systems.
The BOP Advantage: Cost Savings and Simplicity
Here's where a BOP shines: it's cheaper and easier to manage. According to 2026 industry data, electrical contractors pay an average of $78 to $180 per month for a BOP—that's roughly $937 to $2,160 annually. Compare that to buying standalone general liability insurance, which averages $104 per month on its own, and you're saving 10-20% by bundling.
Beyond the price tag, there's the convenience factor. Instead of juggling two separate policies with different renewal dates, deductibles, and claims processes, you've got one policy, one premium, one point of contact. If you're a small electrical contractor just starting out or managing a modest team, that simplicity is worth a lot. You can focus on running your business instead of wading through insurance paperwork.
But there's a catch: not every electrical contractor qualifies for a BOP. Insurers typically limit eligibility to businesses with fewer than 100 employees, under $5 million in annual revenue, and low-risk operations. If you're working primarily on residential wiring, service calls, and small commercial jobs, you'll probably meet those criteria. But if you're tackling high-voltage industrial projects or have a growing team, you might not make the cut.
When Standalone Policies Make More Sense
As your electrical contracting business grows or takes on riskier work, standalone policies start looking more attractive. Here's why: flexibility and higher limits. A BOP is designed for small, low-risk businesses, but if you're working on commercial construction sites, handling high-voltage systems, or operating in states with strict liability requirements, you need more coverage than a standard BOP provides.
For example, California often requires electrical contractors with a C-10 license to carry $1 million per occurrence and $2 million aggregate general liability coverage—which a BOP can provide—but Texas mandates at least $300,000 per occurrence and $600,000 aggregate, and some contracts demand even higher limits. If you're bidding on big jobs or working with general contractors who require $2 million or $5 million in coverage, you'll need standalone general liability with higher limits or an umbrella policy on top.
Standalone policies also let you customize your coverage to match your actual risks. Maybe you need higher property limits to cover expensive specialty tools and equipment. Maybe you want inland marine insurance to protect gear while it's in transit between job sites. Or maybe you need professional liability coverage for design-build projects where you're responsible for system design, not just installation. A BOP has a fixed package of coverages—standalone policies let you build exactly what you need.
The trade-off? Standalone policies cost more. Contractors working in high-risk operations or litigation-prone states like California or New York can expect to pay $150 to $300 or more per month just for general liability. Add commercial property insurance and you're looking at a significantly higher total premium than a BOP. But if that coverage is what you need to meet contract requirements or protect your assets, it's money well spent.
Cost Comparison: Running the Numbers
Let's put some real numbers on this. A typical BOP for an electrical contractor costs around $166 per month, or about $1,989 annually, according to 2026 data. That gets you general liability, commercial property, and business interruption coverage in one package.
Now compare that to buying policies separately. General liability alone averages $104 per month. Add commercial property insurance—which varies widely based on the value of your tools and equipment—and you're easily looking at $150 to $200 per month combined, possibly more. That's why bundling with a BOP typically saves 10-20% compared to standalone policies.
But here's what affects your actual rate: the type of electrical work you do, your claims history, how many employees you have, where you operate, and what coverage limits you choose. If you're doing low-voltage residential work in a state with reasonable insurance rates, you might pay closer to $78 per month for a BOP. If you're running high-voltage commercial projects with a dozen employees in New York, you could pay $194 per month or more—and that's still for a BOP. Standalone policies with higher limits could push you well over $300 monthly.
How to Know When It's Time to Switch
Most electrical contractors start with a BOP when they're small and transition to standalone policies as they grow. Here are the signs it might be time to make the switch:
You're hitting BOP eligibility limits. If you're approaching 100 employees or $5 million in revenue, your insurer might not renew your BOP. You're being asked for higher coverage limits. When contracts require $2 million, $5 million, or higher liability limits, you'll need standalone general liability or an umbrella policy. You're taking on riskier work. High-voltage systems, industrial projects, or specialized electrical design work often require coverage that exceeds what a BOP offers. You need specialized endorsements. Maybe you need errors and omissions coverage, inland marine for equipment in transit, or pollution liability for certain types of electrical work—coverages that aren't standard in a BOP.
The good news? You're not locked in forever. Insurance policies are typically annual contracts, so you can reassess each year. If your needs change—whether you're scaling up or scaling back—you can adjust your coverage accordingly.
Getting Started: Next Steps
So what should you do? Start by honestly assessing your business. Count your employees, tally your revenue, and look at the types of projects you're taking on. Check any contracts you've signed to see what insurance requirements are listed. Then get quotes for both a BOP and standalone general liability plus commercial property coverage.
When you're comparing quotes, don't just look at the premium—look at what you're actually getting. What are the coverage limits? What's the deductible? Are there any exclusions that could leave you exposed? Does the policy include business interruption coverage, completed operations, and tools coverage?
For most small electrical contractors, a BOP is the smart choice—you get solid coverage at a lower price, with less hassle. But as your business grows or your work gets more complex, standalone policies give you the flexibility and higher limits you need. The key is matching your insurance to where your business actually is today, not where it was five years ago or where you hope it'll be someday. Talk to an insurance agent who specializes in contractor coverage, get quotes for both options, and choose the one that protects your business without breaking the bank.
