Business Owners Policy (BOP) Coverage vs. General Liability (GL) Coverage

Business owners’ policy (BOP) and general liability insurance (GL) are both forms of insurance that protect businesses against a number of losses. However, they offer different types of coverage and can have different price points. The specific coverages covered by these two policies differ, but they also share some comparable coverages. It is important to understand the differences between business owners’ policy insurance and general liability insurance before you purchase either type of coverage so you don’t end up with insufficient coverage or duplicate coverage.

What is general liability insurance (GL)?

General liability insurance protects you from loss or damage that occurs when your business is found legally responsible for personal injury or property damage. There are several different types of liability insurance for businesses, and you may need more than one type to fully protect yourself from risk. It is important to note that general liability insurance only covers liability losses and does not cover other forms of loss.

What is a business owner’s policy (BOP)?

A business owner’s policy (BOP) packages several types of coverage into a single bundle to help small businesses save money.

Business owner’s policies typically include the following types of coverage:

  • Property insurance. This covers damage to your business property, such as your building, office furniture, and inventory. If you’re renting your space, it also covers the improvements you’ve made there.
  • General liability insurance. This covers damages if you’re sued over business-related issues like injuries on your property, damage caused by you or your employees, and claims of negligence or poor workmanship. General liability insurance is sometimes referred to as commercial general liability (CGL) insurance.
  • Business interruption insurance. If your business must close temporarily due to damage from a covered event, this reimburses you for lost income and pays certain ongoing expenses, like payroll and rent.

Insurance is an important investment for your business. It can help protect your company from financial ruin in the event of a disaster, lawsuit, accident, or other unexpected occurrences.

Whether it’s general liability insurance or a business owner’s policy, it’s important for all businesses to obtain insurance and this is why:

Insurance can safeguard your business from financial ruin if you are sued. If someone sues you because they were injured on your property or there was damage to their property due to your business, general liability insurance can pay for legal costs and settlements. A BOP can also pay for any equipment that is lost due to theft or vandalism.

If you have employees working in your business, it is required to provide workers’ compensation insurance in most states. This type of insurance helps cover medical and rehabilitation expenses if an employee is injured at work as well as lost wages for the time they are out of work.

Looking for more information on business insurance coverage? Check out our article How To Choose The Best Business Insurance Policy For Your Small Business.

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