Insurance can be a tough subject for many small business owners to approach. With so many options available, deciding which policy fits your business best is crucial, but it can also feel overwhelming. One common question centers on business owner’s policy vs. general liability—which is right for you?
These two policies serve different purposes. This guide will help you understand the differences between business owner’s policy vs. general liability and learn when to choose one over the other.
What Is General Liability Insurance?
General liability insurance is the foundation of protection for many small businesses. It shields against the financial burden of lawsuits and claims related to third parties. Essentially, it protects you when your business unintentionally causes harm, whether that’s property damage, bodily injury, or even reputational harm.
What Does General Liability Insurance Cover?
Here’s a breakdown of common claims covered by general liability insurance:
- Bodily injury: Covers injuries that third parties (like customers or visitors) sustain on your business premises.
- Property damage: Pays for damage your business might accidentally cause to someone else’s property.
- Personal and advertising injury: Covers legal costs for claims like slander, libel, and copyright infringement.
Who Needs General Liability Insurance?
Most businesses, big or small, benefit from general liability insurance. Whether you rent a storefront, meet with clients, or even operate out of your garage, liability risks can arise anywhere. Industries like retail, consulting, and contracting often require this basic level of protection.
What Is a Business Owner’s Policy (BOP)?
A business owner’s policy (BOP) is a bundled insurance solution designed specifically for small businesses. It combines key coverage types into one cost-effective package, offering broader protection than a general liability policy alone. Think of it as one-stop coverage tailored for low-risk businesses.
What Does a BOP Include?
Here’s what you typically get with a BOP:
- General Liability Insurance: Covers the same risks as a standalone general liability policy.
- Commercial Property Insurance: Protects your business’s physical assets—including buildings, equipment, and inventory—from events like fire, theft, or vandalism.
- Business Interruption Insurance: Replaces lost income if your business has to temporarily close due to a covered event, such as extreme weather or property damage.
Who Qualifies for a BOP?
Eligibility for a BOP often depends on the size and risk profile of your business. Typically, small businesses with fewer employees, smaller premises, and relatively low-risk daily operations qualify.
Key Differences Between Business Owner’s Policy vs. General Liability Insurance
When it comes to business owner’s policy vs. general liability, both policies offer liability protection, but there are important distinctions. The primary difference? A BOP is designed to be more comprehensive. Along with general liability coverage, it brings the added benefits of protecting your business property and operations. However, a BOP is not available to high-risk industries, such as construction or manufacturing, while general liability insurance is accessible to virtually any business.
Another key difference between a business owner’s policy vs. general liability lies in cost. The average cost of a BOP is $57 per month, providing more coverage at a lower rate than purchasing general liability and property insurance separately.
When Should Business Owners Choose One Over the Other?
Deciding between a business owner’s policy vs. general liability insurance depends on your business’s specific needs.
If protecting your business against common lawsuits is your primary concern, a standalone general liability policy may be sufficient. For example, if you’re a consultant offering virtual services from your home office, general liability is a good fit since you don’t have a physical storefront or inventory to worry about.
However, if your business operates a physical location, has inventory, or relies heavily on day-to-day operations, a BOP provides a more well-rounded safety net. Imagine owning a neighborhood coffee shop filled with equipment, furniture, and inventory. A BOP will not only cover slip-and-fall claims but also protect your essential assets if disaster strikes.
Smart Insurance Choices Start with Bethany Insurance
Choosing between a business owner’s policy vs. general liability insurance is a critical step in safeguarding your business. Both options can play a key role in managing your risks and ensuring peace of mind. However, the best choice will depend on your specific circumstances.
At Bethany Insurance, we specialize in tailoring insurance solutions for businesses just like yours. Whether you want standalone liability coverage or a comprehensive BOP, our team is here to guide you every step of the way.
Get started today and protect what you’ve worked so hard to build. Request a quote now.
