Can home-based businesses get a BOP?

Yes, many Colorado and Utah insurers offer Business Owner's Policies (BOPs) tailored for eligible home-based businesses, providing broader coverage than homeowners insurance.

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Complete Guide to BOPs for Home-Based Businesses

Why This Question Matters for Colorado and Utah Residents

If you run a business from home in Colorado or Utah, protecting your professional assets can be challenging. Homeowners insurance alone usually doesn’t cover business liability, specialized equipment, or lost business income from interruptions. Fortunately, local insurers recognize the innovation and growth of small home-based businesses across the Front Range and Wasatch regions.

Business value at home: With nearly 54,000 home-based businesses operating in Colorado and Utah, there is a clear need for customized insurance solutions. Many newer business owners underestimate their exposure to theft, guest injuries, or property damage not covered by typical homeowners policies.
Weather and crime risks: Hailstorms (Colorado ranks #2 nationally for hail claims), break-ins, and even wildfire- or flood-related closures can have a disproportionate impact on home-based operations if coverage gaps exist.
Growing demand and local support: Stats show 78% of Colorado and Utah businesses choose independent agents for advice, seeking policies that reflect local regulations and risks. Many carriers now specifically market BOPs to qualifying home-based businesses, with monthly premiums averaging $45–$90 based on profession and coverage level.

What Most People Get Wrong

The most common misconception is that homeowners insurance alone protects business assets. In reality, most standard homeowners policies limit coverage for "business property" to just $2,500—and rarely include liability for business-related incidents or losses off premises.

A second mistake is assuming all home-based businesses automatically qualify for a BOP. Insurers have eligibility criteria, such as limits on annual revenue, number of employees, and whether clients visit your home. Some higher-risk industries (like manufacturing or cannabis) may require specialized policies.

The Complete Picture

A Business Owner’s Policy (BOP) bundles property, general liability, and often business income coverage, designed to fill the specific gaps home businesses face. Unlike homeowners insurance, a BOP can cover:

Equipment and inventory—often at replacement cost, not depreciated value.
Liability for accidents during client meetings at your home.
Off-premises incidents, like theft of business gear from your car in Denver or Salt Lake City.
Income loss from covered interruptions (for instance, if a wildfire closes your neighborhood).

Eligibility typically requires operating under a legal business entity (LLC or sole proprietorship), revenue below insurer thresholds (often $250k–$500k/year), and limited foot traffic or hazardous activities at your home. BOPs are often more affordable than piecing together separate policies, and Colorado/Utah insurers process claims within 60 days by law, ensuring quick support.

Making the Right Decision for Colorado and Utah Residents

Question 1: Does my home-based business meet BOP eligibility requirements?

Before applying, consider these factors:

Is your annual revenue generally below $500,000?
Do you have no more than a few employees working on-site?
Do clients visit your home, or do you store significant business property there?
Are you operating in a low-risk industry (graphic design, consulting, e-commerce, crafts)?

Question 2: What types of risks could impact my business at home?

Evaluate your unique situation:

Could a client be injured at your home during a meeting?
Is your business equipment (cameras, computers, samples) worth more than what your homeowners policy covers?
Would you lose significant income if a disaster forced you to pause operations?

Local example: In Boulder, hail and theft are especially frequent; in Utah, strong support for small-scale e-commerce increases the importance of coverage for home inventory.

Question 3: Am I prepared for future growth or changes?

Think ahead:

Could your business outgrow home-based BOP eligibility (e.g., rapid online sales growth, new employees)?
Do you need coverage that travels with you to client meetings or pop-up events?
Has your insurer proactively explained when you might need to upgrade?

FoCoIns agents help you revisit coverage annually as your operations and risks evolve.

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Real World Examples

When a Boulder Graphic Designer Needed More Than a Homeowners Policy

Background: Samantha runs a graphic design business from her home in Boulder, regularly hosting clients in her converted living room office.

Coverage: BOP with $100,000 property, $1M liability, $50,000 business income/interruption

Monthly Premium: $52/month ($624/year)

The Incident: A client tripped on a rug while carrying portfolio boards during a meeting and suffered a wrist fracture. Samantha faced $16,000 in medical and legal expenses.

Total Claim Cost: $16,000 (client settlement and medical bills)

Samantha's Cost: $500 (liability deductible—covered within 44 days by her insurer as required by Colorado claims law)

"Without the BOP, I would’ve had to cover legal bills myself—my homeowners policy flat-out excluded business liability! FoCoIns saved me from a scary financial hit."

Salt Lake City Web Developer Recovers Equipment After Theft

Background: Marcus, a freelance web developer in Salt Lake City, travels to coffee shops and client offices with his high-end laptop and mobile hotspot.

Coverage: Home-based BOP with $25,000 off-premises business property and $300,000 liability

Monthly Premium: $45/month ($540/year)

The Incident: Marcus’s laptop and tablet were stolen from his car while parked in Sugar House. The total loss included a $2,800 MacBook Pro and a $600 tablet.

Total Claim Cost: $3,400 (full replacement under replacement cost provision)

Marcus's Cost: $500 deductible

"My claim was settled in about 30 days. I never realized my homeowners insurance would only replace about $1,000—having BOP coverage let me get back to work quickly and professionally."

Provo Florist Handles Property Damage at a Home Show

Background: Evelyn, a home-based florist in Provo, sells arrangements at weekend fairs and delivers locally.

Coverage: BOP with $35,000 business property, general liability, and $15,000 business income protection

Monthly Premium: $60/month ($720/year)

The Incident: During a home and garden show, Evelyn accidentally caused a water spill that damaged a neighboring vendor’s display ($4,500 in losses).

Total Claim Cost: $4,500 (paid to the neighboring business)

Evelyn's Cost: $500 deductible

"FoCoIns explained that my policy followed me for these events—something my homeowners insurance never would have covered. This one claim paid for over 10 years of premiums!"

Avoid These Common Mistakes

Mistake #1: Assuming Homeowners Insurance Covers Business Claims

What People Do: Rely solely on a standard homeowners policy for business property, liability, or income coverage.

Why It Seems Logical: Many believe home insurance naturally extends to all activities and property inside the home, including business use.

The Real Cost: In Colorado or Utah, a liability claim from a client injury or equipment theft can result in $5,000-$15,000+ in losses with only $2,500 in limited coverage from most home policies—and no coverage for business legal liability.

Smart Alternative: Work with FoCoIns to evaluate actual coverage gaps. Pairing a home-based BOP with your homeowners policy means you’re covered for business risks without paying for unnecessary extras. Local advisors explain exactly how your coverage works and where state law matters most.

Mistake #2: Not Disclosing Your Business to Your Insurance Company

What People Do: Operate a small business at home (like consulting or e-commerce) without telling their insurer for fear of higher costs or denial.

Why It Seems Logical: People want to avoid paperwork or premium increases, so they assume "flying under the radar" is safest.

The Real Cost: If a claim reveals undisclosed business activity, claims may be denied and policies revoked. In Utah and Colorado, home policies are legally allowed to exclude undisclosed businesses—sometimes retroactive, leaving businesses on the hook for tens of thousands in damages.

Smart Alternative: Always be honest about your business activities up front. FoCoIns can shop multiple carriers to find the right fit without risk of non-disclosure penalties—transparency now means peace of mind later.

Mistake #3: Choosing the Cheapest Policy Without Reviewing Coverage Types

What People Do: Select the lowest advertised BOP premium without checking crucial features like replacement cost vs. actual cash value, off-premises coverage, or liability limits.

Why It Seems Logical: It saves money in the short term, and comparing costs seems easiest on price alone.

The Real Cost: Cheap, stripped-down BOPs in Colorado and Utah may only cover depreciated value for equipment (resulting in up to 40% less payout), skip business interruption insurance, or exclude coverage for work done away from home offices. Larger out-of-pocket losses (often $2,000–$10,000) are typical.

Smart Alternative: Review your policy closely with a FoCoIns advisor, who will walk you through the difference between replacement cost and cash value, and help you find balanced, affordable coverage that genuinely fits your risk tolerance and business needs.

FAQs On The Same Topic

Find answers to your most pressing insurance questions right here.

Do lenders require builder's risk insurance?

Yes, most lenders in Colorado and Utah require builder’s risk insurance before funding construction projects to protect their financial interest until the build is complete.

How does builder's risk insurance differ from permanent property insurance?

Builder's risk covers a building while it's under construction or renovation, protecting against damage before occupancy. Permanent property insurance takes over once construction is complete, covering the finished structure and ongoing operations.

What is testing coverage in builder's risk insurance?

Testing coverage in builder’s risk insurance safeguards against damage that occurs while new building systems—like HVAC or electrical—are being tested during construction. It’s critical for projects in Colorado and Utah facing complex system start-ups or severe weather risks.

Does builder's risk insurance cover subcontractors' work?

Yes, builder's risk insurance typically covers subcontractors’ work if they are listed in the policy, but always verify coverage specifics for your Colorado or Utah project.

Can I include coverage for flood or earthquake in my builder's risk policy?

Coverage for flood and earthquake is typically excluded from standard builder's risk policies, but many insurers offer these protections as add-ons or separate policies in Colorado and Utah. Ask about endorsements specific to your location's regional risks before starting your project.

Is theft by employees covered under builder's risk insurance?

Theft by employees is almost always excluded from builder's risk insurance. You'll need a separate fidelity bond or crime policy to get coverage for employee theft risks.

What are soft costs in builder's risk insurance?

Soft costs in builder's risk insurance include non-physical expenses such as interest, legal fees, lost rents, and permit costs that arise from construction delays due to a covered loss. In Colorado and Utah, adding soft cost coverage is essential to fully protect your building project from financial setbacks.

How do I file a claim under a builder's risk policy?

Report the loss immediately to your insurer, document all damage with photos and receipts, provide detailed project information, and cooperate fully with the claims process.

Do I need builder's risk insurance for renovation projects?

Yes, builder's risk insurance is strongly recommended for significant renovations or additions in Colorado and Utah to cover potential losses during construction. It bridges critical gaps left by standard property policies, especially in high-risk zones.

What is the difference between builder's risk and general liability insurance?

Builder’s risk covers property damage to the construction project itself, while general liability protects against third-party injuries or property damage resulting from construction activities.