If you're opening a salon or spa, you've probably heard the term "BOP" thrown around—and maybe wondered if it's something you actually need or just insurance industry jargon. Here's the thing: a Business Owner's Policy could save you hundreds of dollars a year compared to buying separate insurance policies. But it's not the right choice for everyone.
Let's break down when a BOP makes sense for your business and when you're better off with standalone coverage. No jargon, no insurance speak—just practical advice to help you make the right call.
What's Actually in a Business Owner's Policy?
A BOP bundles three essential coverages into one policy: general liability insurance, commercial property insurance, and business interruption coverage. Think of it as a package deal designed specifically for small businesses.
General liability covers the big scary scenarios—like when a client slips on your freshly mopped floor and breaks their wrist, or when someone claims that hair treatment you recommended caused an allergic reaction. This coverage handles their medical bills and legal fees if they sue.
Commercial property insurance protects your physical stuff—styling chairs, hair dryers, massage tables, product inventory, even the improvements you made to your leased space. If there's a fire, theft, or storm damage, this coverage helps you replace what's lost.
Business interruption coverage is the safety net people forget about until they need it. If a covered disaster forces you to close temporarily, this pays for ongoing expenses like rent and utilities, plus replaces the income you're losing while you're shut down. For a salon or spa where you can't work remotely, this coverage can literally save your business.
The Cost Difference: BOP vs Buying Separately
Here's where the BOP really shines. Beauty salons pay an average of $99 per month for a BOP in 2025, while spa and wellness businesses pay around $156 monthly. If you bought general liability and commercial property insurance as separate standalone policies, you'd pay significantly more—often 20-30% higher overall.
The exact savings vary by state. If you're in North Dakota, you might pay as little as $85 monthly for salon BOP coverage. In New York or New Jersey, that jumps to $116-$181 depending on your business type. But even in expensive states, the BOP bundle still beats buying policies separately.
There's another advantage: simplicity. One policy means one renewal date, one deductible to track, and one insurance company to deal with when you need to file a claim. When you're already juggling appointments, inventory, and payroll, that administrative simplicity matters.
Do You Actually Qualify for a BOP?
BOPs aren't available to every business. Insurance companies designed them for small, relatively low-risk operations. To qualify, you typically need fewer than 100 employees, less than $5 million in annual revenue, and a physical location where most of your business happens.
Most traditional hair salons sail through underwriting with minimal scrutiny. But if you're running a medical spa offering Botox, laser treatments, or other aesthetic procedures, expect more questions. Services like tattoos, piercings, and permanent makeup also trigger additional underwriting because they carry higher liability risks.
Here's an important catch: you need property to protect. A BOP includes commercial property coverage, which means it's designed for businesses that own or lease a physical location with equipment, furniture, and inventory. If you're a booth renter sharing space in someone else's salon, or a mobile stylist working out of clients' homes, much of what makes a BOP valuable doesn't apply to you.
When Standalone Coverage Makes More Sense
Mobile professionals fall into the same category. If you travel to clients for spray tans, makeup application, or massage therapy, your primary risk is liability—not property damage to a building you don't have. Standalone general liability gives you exactly what you need without paying for what you don't.
There's another scenario where standalone policies might be necessary: when your business outgrows BOP limits. If your salon expands to multiple locations, your revenue crosses $5 million, or you need highly customized coverage that a standard BOP can't accommodate, you'll graduate to a Commercial Package Policy. These are built from individual standalone policies that you can tailor precisely to your needs—but they cost more and come with more complexity.
What a BOP Doesn't Cover (And Why That Matters)
Even the most comprehensive BOP leaves gaps that matter for salon and spa owners. Professional liability insurance—also called errors and omissions or malpractice insurance—isn't included. This coverage protects you if a client claims your service caused them harm: a bad chemical reaction, a botched color correction, or an injury during a massage.
For medical spas offering injectable treatments or laser procedures, professional liability is absolutely critical—and you'll need to buy it separately. Even traditional salons should consider it, especially if you're doing chemical treatments, extensions, or advanced color work.
Workers' compensation is the other big omission. If you have employees—even just one assistant or receptionist—most states legally require workers' comp coverage. A BOP won't include this, so you'll need to purchase it separately regardless of whether you choose a BOP or standalone policies.
The good news? Many insurers let you bundle professional liability with your BOP for additional savings. It's worth asking about when you're getting quotes.
Making the Right Choice for Your Business
Start by being honest about what you're actually protecting. If you own or lease your salon space and have significant equipment and inventory, a BOP almost certainly saves you money. Most landlords won't even approve your lease without proof of at least $1 million in liability coverage anyway, so you need that protection regardless—might as well get it efficiently.
If you're a booth renter, freelancer, or mobile professional, standalone general liability gives you the protection you actually need without paying for coverage that doesn't apply to your situation. You can always add professional liability if your services warrant it.
Get quotes both ways. Insurance pricing varies wildly between companies, and sometimes a standalone general liability policy from one carrier actually costs less than a BOP from another—even though BOPs are usually cheaper. Spend 30 minutes comparing options before you commit.
The right insurance setup protects your business without draining your budget. Whether that's a BOP or standalone coverage depends entirely on your specific situation—but now you know exactly which questions to ask to figure it out.
