Both general liability insurance and a business owner's policy provide basic protection for your small business, so which one is right for you? Find out which policy fits best by taking a closer look at their benefits and differences.
General liability insurance offers blanket protection against common torts that small business owners may face. It kicks in when a third party (anyone who doesn’t work for your business) sues you over:
When you're sued by a third party, general liability compensates you for attorney's fees, court costs, and settlements or judgments up to your policy limit. Even the most careful business owners could face these claims, which is why this coverage is considered the cornerstone of any business protection plan.
A business owner’s policy (BOP) is essentially a general liability insurance policy with added property protectio. It bundles several insurance policies into a single package at a reduced rate. A BOP typically includes:
Though a BOP is a comprehensive and affordable option, it’s not available to all business owners. To qualify for this coverage, you must:
There's plenty of common ground between standalone general liability insurance and a BOP.
Both policies offer basic liability protection. A general liability policy and a BOP both protect your small business from premises liability, property damage liability, and advertising liability claims.
Remember, a business owner’s policy includes general liability coverage, so you only need to purchase one of the two policies.
There are also differences between a standalone general liability policy and a BOP:
A BOP can reduce your insurance rates. If you’re looking to save money on small business insurance, a BOP should be the first place you look. You’ll receive multiple types of coverage at a lower rate than you’d pay if you purchased each policy individually.
BOPs are not available to all business owners. A business owner must meet certain criteria to be able to bundle insurance policies. Only low-risk small businesses can purchase a BOP, while almost any business can purchase general liability insurance. For example, if you work in construction, you may not be eligible for a BOP because your industry is considered high risk. You could, however, still purchase a general liability policy to protect your construction business from liability exposures.