What is General Liability Insurance? How is it similar to a Business Owner’s Policy? How is it different? This article will provide the answers to those questions.
When it comes to your business, having the right insurance coverage is important, however it can be overwhelming when trying to decipher which is the right coverage for you. Notice what general liability vs. business owners policy includes or excludes.
What Is General Liability Insurance?
General liability insurance is a type of insurance coverage that protects businesses and individuals against accidents or mistakes that happen within your company.
This type of insurance typically covers a range of situations, including slip-and-fall accidents, property damage caused by a business’s operations, advertising injuries (such as copyright infringement or defamation), and bodily injuries or medical expenses incurred by third parties due to the business’s negligence.
The policy generally provides coverage for legal expenses, including attorney fees, court costs, and settlements or judgments up to the policy’s limits. It helps protect businesses from financial ruin by providing compensation for covered claims, thus mitigating the potential impact on their assets and reputation.
What Is A Business Owners Policy?
ABusiness Owners Policy (BOP) is a type of insurance policy that is specifically designed for small to medium-sized businesses. It combines several different types of coverage into one single package, offering a comprehensive insurance solution for business owners.
There are 3 main coverages:
Property Insurance
Protects physical assets of your business like a building or furniture against losses caused by fire, theft, vandalism, or other covered perils
General Liability Insurance
Protects your business from claims arising from bodily injury or property damage caused to customers, vendors, or the general public due to your business operations
Business Interruption Insurance
Protects the financial impact of a temporary shutdown or disruption to your business operations due to a covered event
In addition to these coverages, a BOP may also include additional optional coverages or endorsements based on your business needs, such as, crime insurance, data breach coverage, or equipment breakdown insurance.
Vandalism
Fire
Slip & Fall
What Are The Similarities And Differences Between General Liability Vs. Business Owners Policy?
There are more differences than there are similarities with general liability vs. business owners policy.
Similarities:
Both General Liability Insurance and a BOP provide liability coverage
Both policies typically include coverage for legal defense costs associated with liability claims. This can help cover attorney fees, court costs, settlements, or judgments.
Differences:
General Liability Insurancefocuses solely on liability protection. It does not include coverage for property or business interruption. BOP combines liability coverage with property insurance and often includes business interruption coverage, which helps compensate for lost income/ongoing expenses if your business operations are temporarily disrupted due to a covered event.
A BOP is a packaged policy that combines multiple coverages into a single policy, more convenient and cost effective. General Liability Insurance is a standalone policy solely focused on liability coverage.
General Liability Insurance policies can be tailored to some extent by adding optional endorsements or additional coverages. BOP offers a more comprehensive package with pre-packaged coverages, making it a convenient choice for small to medium-sized businesses that want a standardized yet broad insurance solution.
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Still would like more information regarding general liability vs. business owners policy? Check out these articles below!
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