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Edited by: Kimberlee Leonard
 and Reviewed: Kimberlee Leonard

General Liability Insurance vs. Business Owner’s Policy

Author: | Aug 17, 2023

Editorial Note: We earn a commission from partner links on Go Sifter Advisor. Commissions do not affect our editors’ opinions or evaluations.

In the ever-evolving landscape of business risks, it is crucial for entrepreneurs and business owners to have the right insurance coverage in place. General liability insurance and business owner’s policy (BOP) are two common insurance options. These insurance policies provide essential protection for businesses, but understanding their differences is key to making an informed decision. In this article, we will explore general liability insurance vs. business owner’s policy, highlighting their respective benefits and considerations. By delving into the specifics of each policy, you can determine which option aligns best with your business needs and helps safeguard your enterprise from potential risks and liabilities.

What Is a Business Owner’s Policy?

A business owner’s policy (BOP) is a comprehensive insurance package designed specifically for small and medium-sized businesses. It combines multiple coverages into a single policy, providing a convenient and cost-effective solution for business owners. A typical BOP includes general liability insurance, which protects against claims of bodily injury or property damage caused by business operations. Additionally, it includes property insurance, which covers your business property, equipment, and inventory against theft, fire, or other covered perils.

Some BOPs may also include business interruption insurance, which provides coverage for lost income and expenses in the event of a covered disruption to your business operations. By bundling these coverages together, a business owner’s policy offers comprehensive protection, minimizing potential gaps in coverage and providing peace of mind for business owners. It is an ideal option for businesses looking for a convenient and cost-effective insurance solution that addresses multiple aspects of their operations.

What Is General Liability Insurance?

General liability insurance safeguards businesses against potential financial losses arising from claims of bodily injury, property damage, and personal injury attributable to their operations. It provides protection by covering legal expenses and potential settlements, mitigating the financial impact that may result from such claims.

It safeguards your business from unexpected lawsuits and claims it is the ultimate safety net for small business owners. This comprehensive coverage steps in when a third party sues over bodily injuries on your premises, property damage during work, or advertising/personal injuries like slander or copyright infringement.

General liability insurance is an important component of a comprehensive business protection plan. It provides coverage for various aspects, such as attorney’s fees, court costs, and settlements, which helps protect your business. You can enhance your financial security and gain peace of mind, knowing that your business is safeguarded against potential risks. It serves as a fundamental element in managing and mitigating liabilities that may arise during the course of your business operations.

If you own or operate a physical location for your business, general liability insurance can provide premises liability coverage. This means it can protect you if someone is injured on your property due to a hazard or negligence on your part. For instance, if a customer trips over a loose carpet and injures themselves, your insurance can help cover their medical expenses and potential legal costs.

Comparing Costs: Business Owner’s Policy vs. General Liability Insurance

The cost of a business owner’s policy (BOP) and the cost of general liability insurance can vary based on different factors. On average, general liability insurance costs around $76 per month. On the other hand, a business owner’s policy is priced at approximately $72 per month for business owners.

The actual cost of business liability insurance depends on the type of coverage you choose. It also depends on the industry you’re in, and specific details about your business and where it’s located.

When comparing general liability insurance and a business owner’s policy , note that general liability insurance is typically more affordable. This is because it covers a narrower range of situations. However, this cost advantage comes with a trade-off – general liability insurance offers less extensive coverage in the event of unforeseen circumstances. It is essential to weigh the costs against the level of protection required to make an informed decision for your business.

When thinking about the cost, you must consider what your business needs and the risks it faces. You might want to get quotes from different insurance companies. Also think about how much coverage your business requires to stay protected.

Understanding the Differences: General Liability vs. Business Owner’s Policy

General liability insurance provides essential coverage for your business. It protects against injuries or property damage caused by your operations. It offers support when accidents occur.

On the other hand, a business owner’s policy goes beyond general liability insurance. It provides additional coverage for your business property and potential interruptions. It offers a more comprehensive level of protection.

When it comes to cost, general liability insurance is typically more affordable compared to a business owner’s policy. The latter provides broader coverage but at a slightly higher price point.

Ultimately, the choice between general liability insurance and a business owner’s policy depends on your specific business needs. Assess the risks, consider your budget, and select the insurance option that aligns best with your requirements.

Frequently Asked Questions

What does business insurance cover?

Business insurance covers a wide range of risks and potential losses. It covers property damage, liability claims, legal expenses, business interruption, and employee injuries. Additionally, it includes coverage for professional errors or omissions, theft, and loss of assets.

What are the main types of business insurance?
How to calculate business income for insurance?
What are the key differences between product liability insurance vs. general liability insurance in terms of the types of risks they cover?
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