What Is The Difference Between A General Liability Policy And A Business Owner’s Policy (BOP)?

A small business owner looks at an iPad to review insurance policies.
| 07.11.22
Sarah Prais

As a small business owner reviewing policies to protect your business, including your property and employees, you might be asking yourself—which policies work best for your business? General liability and a business owner’s policy are good starting policies for a business, but you have to choose one or the other. We’ll tell you the difference here.

What is the difference between General Liability and a Business Owner's Policy?

Which policy works best for your business? Let’s break down both policy types to decide! 

Business Owner’s Policy (BOP). This type of policy is convenient for small businesses. A BOP bundles property and liability coverage for your small business into one cost-effective policy. It typically covers the following: commercial buildings, business personal property, business interruption, liability coverage that concerns bodily injury, personal and advertising injury, and also medical expenses (essential in the event of an accident on-premises). 

A BOP policy will also typically ensure that legal fees and court costs are also covered in the event a claim is filed against your small business. You don’t need general liability coverage if you have a BOP in place because a BOP already contains general liability!

General Liability. This type of policy is also considered standard for small businesses. General liability covers claims involving third parties, so think customers, clients, vendors, and anyone having contact with your business. If your business causes injury to another person or damage to someone else’s property or business, having general liability coverage in place can help protect your business from the ensuing costs depending on the coverage you choose. 

For small business owners such as yourself, it is a good idea to consider purchasing just in case another party sues you for bodily injuries they suffered while on your premises, or you’re sued over advertising or personal injuries like slander, libel, and copyright issues. Claims of that nature can devastate a business without coverage! Leasing contracts often require general liability. What’s not covered by general liability? Damage to your own business property, for example. For that, you need a BOP instead.

We know what you’re thinking; what is the difference here? Yes, these policies are similar because they are both basic business insurance policies. The main difference is that while BOP combines general liability with property damage coverage, general liability insurance will not cover property insurance for your own business property. For both, you need a BOP. You can stick with general liability if you don’t need coverage for your business property.

Which policy is right for your business? B2Z has a handy tool to help. Check out our Coverage Tune-Up. It’s a quick quiz that matches you with recommended coverage types. Or consider having a licensed agent walk you through what is best for your business. 

General liability insurance is great if you only want to cover liability losses and not concern yourself with property losses. For example, you can consider a general liability policy if you do not have a building where customers frequent. If you are looking to protect liability losses and property losses with your business, it is better to go with a BOP policy. 

It is so important to protect the small business that you have worked so very hard for. General Liability and a Business Owner’s Policy are both great options to consider. Think about what you are looking to protect and go from there. We hope this helps you decide! If cost is your concern, let us give you a quote! We’d be happy to work with you.

About the Author

Sarah Prais is a content creator who enjoys blogging on a myriad of topics both professionally and personally. She loves spending time with her crazy dog, and watching anything on Shudder with her fellow horror fan—aka boyfriend.

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