Here's something most small business owners don't realize until it's too late: your Business Owners Policy is designed to be customized. Think of your standard BOP as a solid foundation—it covers the basics like property damage and general liability. But the real world throws curveballs that basic coverage wasn't built to handle. What happens when a ransomware attack locks you out of your customer database? Or when your walk-in freezer dies overnight, ruining $15,000 worth of inventory? That's where endorsements come in.
Endorsements—also called riders or add-ons—are amendments to your insurance policy that extend coverage into areas your base policy doesn't touch. They're how you turn a one-size-fits-most policy into protection that actually fits your business. And the best part? Most endorsements cost significantly less than buying separate standalone policies.
Why Your Standard BOP Leaves Gaps
A standard BOP bundles together general liability insurance and commercial property insurance, which handles most physical risks—fires, theft, someone slipping in your lobby. But insurance policies are written to cover specific, traditional risks. They weren't designed for today's digital-first, regulation-heavy business environment.
Your BOP won't cover a data breach that exposes customer credit card information. It won't pay to replace spoiled food when your refrigeration system fails. And it definitely won't defend you against an employee lawsuit claiming discrimination or wrongful termination. These aren't obscure scenarios—they're among the most common claims small businesses face in 2024 and 2025.
According to recent industry data, the average BOP costs small businesses about $67-118 per month. But that base coverage only scratches the surface of what modern businesses need. The good news? Adding the right endorsements doesn't break the bank, and it could save your business from a six-figure loss.
The Most Important BOP Endorsements to Consider
Cyber Liability Coverage
If your business has a website, accepts credit card payments, or stores any customer information electronically—congratulations, you have cyber risk. A cyber liability endorsement covers data breaches, ransomware attacks, privacy liability, and the costs of incident response. This includes notifying affected customers, providing credit monitoring, and hiring forensic experts to investigate the breach.
Here's the catch: cyber endorsements added to BOPs typically exclude first-party coverages, meaning they won't necessarily cover your own costs from a cyberattack—just your liability to others. For businesses with significant digital operations, a standalone cyber policy often makes more sense. But for smaller operations with basic cyber exposure, a BOP endorsement provides essential baseline protection at a fraction of the cost.
Equipment Breakdown Coverage
Also called boiler and machinery insurance, equipment breakdown coverage is one of the best values in commercial insurance. For typically less than $10 per month, you get protection when critical equipment suddenly fails—think HVAC systems, commercial refrigerators and freezers, computer servers, or production machinery.
Standard equipment breakdown endorsements typically provide $100,000 of coverage with a $500 deductible for each covered breakdown, though some policies cap coverage at $50,000 per occurrence. Many policies also include up to $3,000 for spoiled perishable goods if refrigeration fails due to equipment breakdown. Some endorsements even cover the extra cost to upgrade to more energy-efficient equipment—up to 125% of the standard replacement cost.
Hired and Non-Owned Auto (HNOA) Coverage
If you or your employees ever use personal vehicles for business purposes—running to the bank, visiting clients, picking up supplies—you need HNOA coverage. This endorsement provides liability coverage for leased, rented, and personal vehicles used for commercial purposes. Your employees' personal auto policies won't cover accidents that happen during business use, leaving you exposed to potentially massive liability claims.
HNOA is especially critical for service businesses, consultants, real estate agents, and any business where employees regularly drive their own cars for work-related tasks. It's inexpensive relative to the exposure it covers.
Employment Practices Liability Insurance (EPLI)
The moment you hire your first employee, you open yourself up to employment-related claims. EPLI covers defense costs and damages from lawsuits alleging wrongful termination, discrimination, harassment, retaliation, and wage and hour violations. These claims are expensive to defend even when you win—legal fees alone can run $50,000 or more.
Smaller businesses often add EPLI as a BOP endorsement to keep costs manageable. Some carriers, like The Hartford, now include wage and hour defense cost coverage automatically in their BOP EPLI endorsements—a valuable addition given that wage and hour claims have surged in recent years. Note that EPLI is typically written on a claims-made basis, meaning both the incident and the claim must occur during your policy period.
For larger companies or those with more complex employment situations, standalone EPLI policies offer considerably higher limits and broader coverage than BOP endorsements.
Professional Liability (Errors and Omissions)
Professional liability insurance, also called errors and omissions (E&O) insurance, protects you when clients claim your professional services fell short of expectations or caused them financial harm. This is essential for consultants, accountants, lawyers, real estate agents, financial advisors, IT professionals, and anyone providing expert advice or services.
While some insurers offer professional liability as a BOP endorsement, many professional services businesses require standalone E&O policies for adequate protection. Standard BOPs explicitly exclude liability arising from professional services, so don't assume you're covered without specifically adding this endorsement or purchasing a separate policy.
How Much Do Endorsements Cost?
Endorsement pricing varies significantly based on your industry, location, coverage limits, and the specific carrier. Some endorsements cost a flat fee; others are priced as a percentage of your base BOP premium. Equipment breakdown often costs less than $10 monthly, while cyber liability and EPLI endorsements typically run higher depending on your business size and risk profile.
As a ballpark estimate, most small businesses can add essential endorsements to their BOP for an additional $20-50 per month. That's a small price to pay for protection against risks that could otherwise put you out of business.
Keep in mind that endorsements offer limited coverage compared to standalone policies. If your business has significant exposure in any particular area—like high cyber risk or substantial professional services revenue—you may hit the limits of what a BOP endorsement can cover. That's when standalone policies become worth the extra investment.
Choosing the Right Endorsements for Your Business
Not every business needs every endorsement. Start by identifying your biggest exposures. Do you rely on refrigeration, HVAC, or critical computer systems? Equipment breakdown is essential. Do you store customer data or process payments electronically? Cyber liability should be non-negotiable. Do you have employees? EPLI protects you from employment-related lawsuits. Do employees drive personal cars for business? Add HNOA coverage.
Talk to your insurance agent about your specific operations. A good agent will help you identify blind spots you might not have considered. They can also explain whether endorsements provide adequate coverage or whether you'd be better served by standalone policies for certain risks.
Review your coverage annually. As your business grows and evolves, so do your risks. The endorsements you need today might not be sufficient next year, and new exposures might emerge that require additional protection.
Getting Started with BOP Endorsements
If you already have a BOP, pull out your policy and review exactly what's covered. Look for exclusions—those are clues about where you might need endorsements. Then have a conversation with your insurance agent about the gaps.
If you're shopping for a new BOP, ask carriers which endorsements they offer and how they're priced. Some carriers automatically include certain coverages in their base BOPs, while others make everything optional. Compare not just the base premium but the total cost once you add the endorsements you actually need.
The bottom line: a Business Owners Policy is a starting point, not the finish line. With the right endorsements, you can transform basic coverage into comprehensive protection tailored to your business's unique risks—without the hassle and expense of juggling multiple standalone policies. Take the time to customize your BOP now, and you'll avoid scrambling to figure out coverage after something goes wrong.
