The Oklahoma Contractor’s Guide to Business Owner's Policy Insurance

Introduction: What’s a BOP and Why Should You Care?

Think of a BOP as an insurance "combo deal" made for small and mid-sized Oklahoma Contractors. It bundles two key coverages, General Liability and Commercial Property Insurance, into one simple policy. This usually costs less than buying them separately.

A BOP is like a multi-tool: it’s a cost-effective way to handle the most common, everyday risks. But just like a multi-tool can’t handle every heavy-duty job, a BOP isn’t a complete solution for contractors. Its convenience is also its biggest weakness, as it often leaves out coverage for the unique risks you face on the move.

This guide will give you a straight-up look at what a BOP covers, what it misses, and how to avoid costly mistakes.

Why It Matters: Real-World Risks for Contractors

Insurance feels like just a piece of paper until you actually need it. For Oklahoma contractors, the risks are real and they are everywhere. Here are a few situations where a BOP can be a business-saver.

The Job Site Slip-Up A simple mistake can turn into a huge lawsuit. An electrician leaves a toolbox in a hallway, the homeowner trips and breaks an arm, and now you’re facing a claim for medical bills. Or a plumber accidentally damages a client’s custom cabinets while working. This is exactly what the General Liability part of a BOP is for. It helps cover medical bills, repair costs, and the legal fees to defend your business in court.

The Overnight Theft Tool theft is a massive problem for contractors, and Oklahoma is one of the top states for it. You could lose thousands of dollars in tools and equipment from your shop overnight. The Commercial Property insurance in a BOP is designed to help you replace stolen tools, equipment, or materials from your primary business location. But here’s the catch: it typically only covers property at your main shop or office, not what’s in your truck or at a job site.

The Unexpected Disaster Oklahoma weather is no joke. A tornado or hailstorm can wreck your workshop, destroying equipment and materials. If a disaster shuts you down, how do you keep paying the bills? Business Interruption coverage, a standard part of most BOPs, is your financial lifeline. It helps replace lost income and cover ongoing expenses like rent and payroll while you get back on your feet.

What a BOP Covers and What It Doesn’t

A BOP is a great foundation, but it’s not the whole house. You need to know its strengths and its major blind spots.

What’s Included in a Standard BOP?

A BOP is built on three main pillars of protection.

General Liability Insurance: This is your "oops" coverage. It protects you if your work causes injury or property damage to someone else, like a client or visitor. It covers things like bodily injury, property damage, and even claims of slander or copyright infringement in your advertising. Crucially for contractors, it also includes Products-Completed Operations, which covers you for claims that pop up after you’ve finished a job.
Commercial Property Insurance: This protects your home base, the physical assets you own or rent at your main business address. This includes the building itself (if you own it) and your business property inside, like tools, equipment, computers, and inventory stored at that location. It typically covers damage from events like fire, theft from your premises, and wind or hail.
Business Interruption Insurance: This is your safety net. If a covered event like a fire at your workshop forces you to shut down temporarily, this coverage helps replace lost income and cover fixed costs like rent and payroll until you’re up and running again.

What Your BOP Won't Cover

Relying only on a BOP is a huge mistake for a contractor. It’s designed for a fixed location, which just isn’t how the trades work. These risks are almost always excluded and need their own separate policies.

Your Work Vehicles: A BOP provides zero coverage for your work truck or van. Your personal auto policy won’t cover business use either. You absolutely need a separate Commercial Auto policy.
Your Crew: A BOP does not cover injuries to your employees. Oklahoma law requires nearly all businesses with employees to have a separate Workers’ Compensation policy to cover medical bills and lost wages for on-the-job injuries.
Your Tools on the Go: This is the most critical gap. The property coverage in a BOP is for your shop, not the job site. To protect tools and equipment in your truck or at a work site, you need a separate policy called Inland Marine Insurance.
Your Professional Mistakes: General Liability covers accidents, not financial losses from bad advice or faulty work. If an HVAC system you install is sized incorrectly and the client has to replace it, that’s a professional error. You need a separate Professional Liability or Errors & Omissions (E&O) policy for that.

Who Needs a BOP and When Is It Required?

A BOP is a great fit for smaller, lower-risk contractors, like a handyman or a small residential plumbing or electrical business that operates out of a workshop. It provides a solid, affordable foundation.

As your business grows, you’ll likely need to graduate to a Commercial Package Policy (CPP). A CPP is more flexible and lets you customize your coverages and limits.

For most Oklahoma contractors, carrying insurance isn’t a choice. It’s a requirement to get work.

State Licensing: The Oklahoma Construction Industries Board (CIB) requires licensed trades like electricians, plumbers, and mechanical contractors to show proof of general liability insurance to get and keep their license.
City Permits: Cities like Oklahoma City and Tulsa have their own insurance rules you must follow to pull permits.
Client Contracts: Nearly all general contractors will require you to have specific liability limits and to name them as an "additional insured" on your policy before they’ll hire you.

Oklahoma-Specific Insights

Operating in Oklahoma means dealing with a mix of state and local rules. While there’s no state license for general contractors, the requirements for specialty trades are strict. The Oklahoma Construction Industries Board (CIB) is the main regulator.

Here’s a quick look at the typical insurance and bond requirements. Always double-check with the CIB and your local city, as rules can change.

General Contractor: No state-level insurance requirement, but Oklahoma City requires at least $50,000 in general liability. Requirements in Tulsa and other cities vary.
Electrician, Plumber, & Mechanical: The CIB requires a minimum of $50,000 in general liability insurance and a $5,000 surety bond.
Residential Roofer: The CIB requires at least $500,000 in general liability insurance.
Commercial Roofer: The CIB requires at least $1,000,000 in general liability insurance.

Beyond the rules, Oklahoma’s weather means hail and wind damage claims are common. A BOP can cover your workshop, but you’ll need a separate Builder’s Risk policy to cover a client’s project while it’s under construction.

Mistakes to Avoid: 5 Common Pitfalls with a BOP

Learning from others’ mistakes is the cheapest way to protect your business. Here are five common and costly traps to avoid.

Thinking Your Tools Are Covered Everywhere. They aren’t. A BOP only covers tools at your main shop. For your tools in transit or at a job site, you need Inland Marine insurance.
Confusing General Liability with a Workmanship Warranty. General Liability is for accidents that damage other people or their property. It won’t pay to redo your own faulty work.
Forgetting to Update Your Policy. The insurance that worked for you as a solo operator is not enough for a growing business with a crew and bigger jobs. Review your coverage with your agent every year.
Not Checking Your Sub’s Insurance. If your uninsured subcontractor causes an accident, the lawsuit will come after you. Always get a Certificate of Insurance (COI) from every sub before they start work.
Buying Only the Bare Minimum Coverage. The minimum limits required for a license might not be enough to cover a serious lawsuit. Choose limits that truly protect your business, not just check a box.

Frequently Asked Questions

Is a BOP required by law in Oklahoma?

No, but the General Liability insurance inside a BOP is required for many licensed trades and to get permits in most cities.

Is a BOP really cheaper?

Yes, bundling General Liability and Commercial Property coverage in a BOP is almost always more affordable than buying them separately.

Does my BOP cover my subcontractors?

No. Your BOP covers you and your direct employees only. Subcontractors need their own insurance.

How fast can I get proof of insurance?

Almost instantly. Most agents can email you a Certificate of Insurance (COI) right after you buy a policy.

What’s the difference between a BOP and a Commercial Package Policy (CPP)?

A BOP is a simple, pre-packaged deal for smaller businesses. A CPP is a more flexible, customizable policy for businesses with larger or more complex risks.

Key Takeaways

Insurance doesn’t have to be a headache. A BOP is a great starting point, but it's not a complete solution.

A BOP bundles General Liability and Commercial Property insurance.
You still need separate policies for your work vehicles (Commercial Auto) and employees (Workers’ Compensation).
To protect your tools on the move, you need Inland Marine insurance.
Always check the latest requirements with the Oklahoma CIB and your local city.

The best next step is to talk to an insurance agent who knows construction. Ask them the right questions to make sure you’re truly covered.

Checklist: Questions to Ask Your Insurance Agent

Does this policy include Inland Marine coverage for my tools at the job site, or is that separate?
A GC requires a $2 million liability limit. Can this BOP be increased, or do I need a CPP?
Can you confirm this policy includes coverage for "products-completed operations"?
Based on my trade, do you recommend I also carry Errors & Omissions (E&O) insurance?
What’s the process for adding a client as an "additional insured" on my policy?

The Oklahoma Contractor’s Guide to Business Owner's Policy (BOP) Insurance