General liability insurance vs. Business owner's policy (BOP): What’s the difference?

[video: an animated header displays the Insureon logo. Underneath it, a subheading displays the text: "Understanding policies with Insureon: General liability vs. Business owner's policy"]

MALE VOICEOVER: As a small business owner, protecting your business from the unexpected isn't just smart, it's essential. Whether you run a retail store, consulting firm, or cleaning service, you face risks every day.

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A customer could slip and fall, a fire could damage your inventory, or a client might file a lawsuit over your advertising.

That's where business insurance comes in.

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[video: Under above header, two bullet points display the text: "General liability insurance"; "Business owner's policy (BOP)"]

Two of the most common and important types of small business insurance are general liability coverage, and a business owner's policy, also known as a BOP.

[video: an illustrated header displays the text: "General liability insurance covers:"]

[video: Under above header, three bullet points display the text: "Customer injuries"; "Damage to client property"; "Personal & advertising injuries"]

General liability insurance is the foundation of small business protection. It helps cover the cost of third-party claims, or people outside of your business, if they're injured or their property is damaged because of your business activities. It also helps cover advertising injuries, such as libel, slander, or copyright infringement. Think of it as your first line of defense against lawsuits and claims that could otherwise be financially devastating.

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But what if your business owns or rents property? What if you've invested in equipment, furnishings, or inventory? That's where a business owner's policy can offer broader protection.

In other words, it covers not just what might happen to someone else, but what might happen to your own business property, too.

[video: an illustrated header displays the text: "A BOP combines general liability with commercial property coverage."]

A BOP combines general liability coverage with commercial property insurance, which protects your physical assets from damage caused by fire, theft, vandalism, and certain natural disasters.

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Some BOPs even include business interruption insurance, which can help cover lost income if a covered event temporarily shuts down your operations.]

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So, who should get general liability insurance? And who needs a BOP?

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[video: Under above header, three bullet points display the text: "Freelancers & gig workers"; "Independent contractors"; "Work-from-home professionals"]

General liability coverage is a great choice if you're a freelancer or independent contractor, if you work from home, or don't have any business owned property to protect.

It's also typically required for certain client contracts and state business licenses.

[video: an illustrated header displays the text: "A BOP is necessary if you:"]

[video: Under above header, three bullet points display the text: "Operate from a physical location"; "Utilize special equipment"; "Stock inventory"]

But if you operate out of a physical location, like a storefront or office, or if you rely on specialized equipment or inventory to keep your business running, then a BOP is probably the better and more cost-effective option.

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That's because bundling property and liability insurance into one policy often costs less than buying each separately.

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Not sure which policy is right for your business? A licensed agent can help you compare coverage options based on your business type, size, and budget.

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Protecting your business doesn't have to be complicated or expensive.

Click the link to get free insurance quotes online with Insureon.

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