General Liability Insurance vs. Business Owner's Policy

When shopping for small business insurance, it's important to understand the difference between General Liability Insurance (GL) and a Business Owner's Policy (BOP). Knowing what each policy covers will help you make the best financial decision on how to protect your business.

General Liability Insurance protects you and your business from "general" claims involving bodily injuries and property damage. In many cases, General Liability Insurance is a requirement for financial lenders, landlords or licensing boards. If a third party is injured while doing business with you, your General Liability Insurance will protect you from having to pay out of pocket for the injured party's medical and repair bills, plus your legal fees if they sue. But as the word "liability" implies, it typically only covers the cost of damage your business causes to others.

General Liability Insurance covers:

  • Third-Party Bodily Injury: When a person is injured while on your business property, they may make a bodily injury claim against your business. For example, a customer stops by your business and slips and falls in your parking lot and breaks their arm.
  • Third-Party Property Damage: When you or one of your employees damages a third party's property, it will help cover the cost of the claim made against your business. For example, a customer tears their clothing on your door, or an employee drops an item on a customer's car and damages it.
  • Advertising Injury: Covers the cost of a claim made against your business because of its advertising practices. For example, a competitor sues you for copyright infringement because your logo looks similar to theirs.
  • Reputation Harm: Other businesses may make a claim your business has harmed their reputation. For example, one of your sales reps makes a claim to a customer about your competitor that is not true and can't be verified.

General Liability Insurance does not cover work place injuries that happen to employees or other people on your payroll. And GL does not cover professional liability/professional services. This is generally covered by Workers' Compensation. It also does not cover the cost of damages to your own business property. Typically, it only helps cover the costs of damage your business causes to others. Commercial Property Insurance is designed to help cover the cost of damage done to your business' property and must be purchased separately.

A Business Owners Policy (BOP) is designed for small-or medium-sized businesses and bundles General Liability Insurance and Commercial Property Insurance into one product. A BOP policy includes the same liability protection as a General Liability Insurance policy; however, it also offers coverage to protect your company property, assets owned and used by your business and lost income due to business interruption related to those losses. BOPs are a good option for small businesses looking to bundle more complete insurance, and for savings, as it's often cheaper to purchase a BOP policy than to buy each policy separately.

BOP covers:

  • General Liability Insurance: This is the same protection as a standalone General Liability policy outlined above. If you purchase a BOP, you don't need a separate general liability policy.
  • Property Insurance and Contents: This covers damages to the building and property such as supplies, inventory, appliances and furniture owned by the company.
  • Business Income Coverage: This covers the loss of income that results when business is interrupted due to fire or other catastrophes.
  • Cyber Protection: This covers your company's legal responsibility for the harm caused to others, as well as damages your business suffers from various cyber-attacks against your business. This is available as an endorsement to the basic BOP policy.

BOP does not provide auto insurance, workers compensation or disability insurance. You'll need separate insurance policies to cover these for your business. Also, Professional Services Liability Coverage is not included, unless selected where available.

Both General Liability Insurance and BOP protect your business from liability. But if you're looking for more coverage and want to save money on small business insurance, a BOP policy is a smart choice. Many insurance carriers offer BOP at a discounted rate - costing less than what you would spend on a standalone policy. As a business owner, you can benefit by protecting yourself from unexpected financial losses in one convenient package designed specifically for small-and mid-sized businesses that offers a broad range of coverage.

How to purchase a BOP policy from Stillwater:

  • Online: It's quick and easy. We ask a few questions and you'll have a quote in two minutes. You can purchase the policy instantly.
  • Call us at (855) 712-4092. Our licensed reps are available Monday through Friday from 8am-9pm ET, and 8am-3pm ET on Saturday.
  • Visit a local independent agent. Click here to find an agent near you.