Paige Cerulli Last Updated On: May 14, 2024

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How Does a Business Owners Policy (BOP) Differ from General Liability Insurance?

There are unavoidable risks involved with running any type of business, but the right business insurance policy can help protect you and the business that you’ve worked so hard to build. As you shop for business insurance, you’ll hear terms like Business Owner’s Policies (BOPs) and general liability insurance. While these types of insurance policies offer similar coverage, there are some key differences between them, and understanding those differences can help you choose the right coverage for your business.

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What Is a Business Owner’s Policy?

A BOP is a package of several types of business insurance policies. It includes:
  • General liability insurance covers third-party lawsuits if someone is injured on your property or their property is damaged by your business.
  • Commercial property insurance covers your business property which is damaged by events like fire or theft.
  • Business interruption insurance reimburses the income you lose when a covered event, like a fire, forces you to temporarily stop operating your business.

What Is General Liability Insurance?

General liability insurance helps to protect you against accidents or mistakes that might happen while running your business, as well as the types of lawsuits that might result. This coverage includes:

  • Bodily injury, such as a customer who is hurt while on your business property
  • Property damage that occurs to a customer’s property because of your business operations
  • Advertising injury, which could happen if your business violates copyright or harms someone’s reputation with your advertising

Business Owner’s Policy vs. General Liability: The Differences

These two types of business insurance offer very similar coverage, so at first, it might be difficult to tell which type of insurance you should choose. Both types of insurance feature liability insurance that covers accidents resulting in bodily injury to others and damage to a customer’s property. But, there are a few key differences between these business insurance types.

General liability coverage features slightly less comprehensive coverage. It includes bodily injury, damage to a customer’s property, and advertising claims coverage. In comparison, a BOP includes general liability coverage, as well as property insurance for your business and equipment. A BOP policy also includes business interruption coverage.

Only certain types of businesses may qualify for a BOP, too. BOP insurance is intended for small to medium-sized businesses operating in lower-risk industries. If your business revenue is $5 million or more, or if you’re in a higher-risk industry like construction or healthcare, you might not qualify for a BOP.

What Types of Business Insurance Do You Need?

General liability insurance or a BOP can be a good place to start, but they might not offer all of the coverage your business needs to be well-protected. Depending on your business size, structure, industry, and unique risk factors, you might want to purchase additional types of business insurance:

  • Commercial auto insurance covers your vehicles while you’re using them for business purposes.
  • Workers’ compensation insurance helps to pay for medical expenses and lost wages that can result if an employee is injured while at work, and most states require businesses with employees to buy this coverage.
  • Errors and omissions insurance is a form of malpractice insurance that helps to protect businesses from client lawsuits accusing them of inadequate work or professional negligence.
  • Data breach coverage protects businesses from cyberattacks and the loss of private customer information that the business collects and stores.

If you’re running a business, it’s important to protect it against the many risks you’ll encounter, and you may find that a combination of several policy types is the best option for your needs. Get small business insurance quotes today to start exploring different plans.

Paige Cerulli Paige Cerulli is a freelance content writer and journalist who specializes in personal finance topics. She graduated from Westfield State University and brings more than a decade of professional writing experience to the ConsumerCoverage team. Paige’s work has appeared in outlets including USA Today, Business Insider, and more.

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