If you run a flooring installation business, you've probably realized that insurance isn't optional—it's essential. Between the risk of damaging a client's property, injuring someone on the job, or having your expensive equipment stolen, you need protection. But here's where it gets confusing: should you bundle your coverage into a Business Owner's Policy (BOP), or purchase general liability and commercial property insurance separately?
The answer depends on your business size, revenue, and specific needs. Let's break down when each option makes sense, what you'll pay, and how to know when it's time to switch from one to the other.
What's Actually Included in a BOP?
A Business Owner's Policy is essentially a bundle deal. It combines three core coverages into one package: general liability insurance, commercial property insurance, and business interruption coverage. For flooring installers, this means you're protected if you accidentally damage a client's hardwood floor during installation, if your tools are stolen from your van, and if a fire forces you to temporarily close your business.
General liability covers third-party bodily injury and property damage. If a homeowner trips over your equipment and breaks an ankle, or you accidentally scratch their kitchen cabinets while moving materials, your BOP handles the medical bills or repair costs. Commercial property insurance protects your business property—whether you own or lease your space—plus your tools, equipment, and inventory. Business interruption coverage replaces lost income if property damage forces you to pause operations while you get back on your feet.
The appeal of a BOP is simplicity and cost savings. Because these coverages are bundled, you typically pay 30-40% less than if you purchased each policy individually. For small flooring contractors just starting out or operating with limited overhead, that discount matters.
Do You Qualify for a BOP?
Not every flooring business can get a BOP. Insurers have strict eligibility requirements, and they're designed to keep the policy accessible only to small, lower-risk operations. Here's what you need to qualify:
First, you need fewer than 100 employees. Most flooring installers are well under this threshold, especially sole proprietors or small crews. Second, your annual revenue typically can't exceed $3-6 million, depending on the insurer. If you're doing $10 million in sales annually, you've outgrown BOP eligibility. Third, your business location can't exceed 35,000 square feet. If you operate out of a home office, a small warehouse, or a retail storefront, you're fine. If you've got a massive distribution center, you'll need standalone coverage.
Most small flooring contractors—whether you specialize in residential carpet, luxury vinyl plank, or commercial tile—fit comfortably within these limits. If you're running a one- to five-person operation with annual revenue under $2 million, a BOP is almost certainly the right choice.
How Much Does a BOP Cost vs Standalone Policies?
For flooring installers in 2025, the average BOP costs around $109 per month, or about $1,304 per year. That's for a standard policy with $1 million per occurrence and $2 million aggregate liability limits, plus commercial property coverage for your tools and equipment.
Compare that to buying policies separately: general liability insurance for flooring contractors averages $63 per month ($756 annually), while commercial property insurance typically runs another $60-80 per month. Add those together and you're looking at $123-143 per month minimum—and that's before factoring in business interruption coverage, which is included in your BOP but would be an additional standalone policy.
The math is clear: a BOP saves you money if you need both liability and property coverage. But here's the catch—standalone policies give you flexibility. If you only need general liability because you work out of your home and don't have a physical business location to insure, paying $63 per month for GL alone makes more sense than $109 for a BOP that includes property coverage you don't need.
Keep in mind that these are averages. Your actual premium depends on your location, claims history, annual revenue, and the value of your equipment. Flooring contractors with documented safety programs consistently see premiums 50-75% lower than those without, so investing in training and safety protocols pays off regardless of which coverage type you choose.
When Standalone Policies Make More Sense
As your flooring business grows, you might outgrow a BOP. Here are the telltale signs it's time to switch to standalone policies or upgrade to a Commercial Package Policy (CPP):
You exceed the eligibility limits. If your annual revenue crosses $6 million, you hire your 100th employee, or you expand into a 40,000-square-foot warehouse, you're no longer eligible for a BOP. At that point, you'll need to move to standalone general liability and commercial property policies, or build a customized CPP that can scale with your business.
You need specialized coverage. BOPs are standardized, which means they don't always cover industry-specific risks. If you install high-end exotic hardwoods in luxury homes, you might need higher liability limits than a standard BOP offers. If you work on commercial projects in high-rise buildings, you might need additional inland marine coverage for tools in transit or professional liability insurance if you're also consulting on flooring design. Standalone policies let you build exactly the coverage stack you need.
You only need one type of coverage. If you're a mobile flooring installer working exclusively out of your van and you don't lease a storefront or warehouse, you might not need commercial property insurance for a business location. In that case, buying standalone general liability is cheaper than paying for a BOP with coverage you won't use.
You're in a high-risk category. Some flooring businesses operate in higher-risk environments—think installing flooring in hospitals, schools, or government buildings. These jobs often come with stricter insurance requirements, including higher liability limits or specific endorsements. A BOP's one-size-fits-all approach might not cut it, and you'll need the flexibility of standalone policies to meet contract requirements.
How to Decide What's Right for Your Flooring Business
Start by assessing your current situation. If you're a small operation with fewer than 20 employees, under $3 million in annual revenue, and you need both liability and property coverage, a BOP is almost always the smartest choice. You'll save money, simplify your paperwork, and get comprehensive protection in one policy.
If you're growing quickly, plan ahead. Review your coverage annually, and watch for the signs that you're approaching BOP limits. It's better to transition to standalone policies or a CPP proactively than to discover mid-claim that you're underinsured because you outgrew your BOP six months ago.
Talk to an insurance agent who specializes in contractors. Flooring installers face unique risks, and a specialist can help you identify coverage gaps you didn't know existed. They can also shop multiple carriers to find you the best rates—some flooring contractors see savings of 30-70% just by working with an agent who understands the industry.
Finally, don't forget about the coverage you'll need beyond a BOP or standalone general liability and property policies. Commercial auto insurance is essential if you're driving to job sites, and workers' compensation is legally required in most states if you have employees. The average flooring installer pays around $185 per month for commercial auto and $193 per month for workers' comp. Factor those into your budget when you're comparing your total insurance costs.
The bottom line: if you're a small flooring contractor who needs both liability and property coverage, a BOP is usually your best bet. It's cheaper, simpler, and gives you solid protection. But as your business grows or your needs become more specialized, standalone policies offer the flexibility and higher limits you'll need to stay protected. The key is to review your coverage regularly and make the switch before you outgrow your current policy.
