As a business owner, it’s essential to protect your assets and limit your financial risk in case of unexpected events. General Liability and Business Owners’ Policy are two of the most popular types of insurance companies should consider. There are significant variations between the two types of coverage, even though they offer commercial protection. To help you determine which kind of insurance is best for your company, we’ll look through the differences between general liability and BOP in this blog post.
General Liability Insurance
General liability insurance is a type of coverage that protects businesses from third-party claims of bodily injury, property damage, and personal injury. Industries like construction, healthcare, or retail should acquire this sort of coverage since they have a higher chance of being the subject of liability lawsuits.
Here are some key features of general liability insurance:
Bodily injury and property damage coverage: General liability insurance offers coverage for third-party claims of property damage or bodily injury that occur on your business property or as a result of your business operations.
Personal & Advertising Injury Coverage: General liability insurance also offers coverage for lawsuits claiming defamation, libel, and copyright infringement as examples of Personal and Advertising Injury.
Legal defense: In the event of a covered claim, general liability insurance will pay for the legal defense costs, even if the claim is eventually found to be without merit.
Business Owners Policy (BOP)
A business owner’s policy, sometimes known as a BOP, is a type of insurance policy that bundles various forms of protection into a single plan. Small to medium-sized firms with less complex insurance requirements generally use BOPs.
Here are some key features of a BOP:
Property insurance: BOPs provide coverage for your business property, including your facility, equipment, and inventory.
General liability insurance: Like General liability insurance, a BOP also offers coverage for third-party claims of bodily injury and property damage, as well as personal and advertising injury.
Business interruption insurance: BOPs also contain coverage for business interruption, which can assist in defraying the costs of missed revenue and ongoing expenses if your company is forced to temporarily close down due to a covered loss.
Main Differences
The scope of coverage is the primary distinction between general liability insurance and a BOP. While a BOP offers property and business interruption coverage in addition to liability coverage, General liability insurance solely covers liability claims.
A BOP is a package policy that incorporates multiple forms of coverage, whereas general liability insurance is a standalone policy that only covers liability claims. It implies that if you already have a General liability policy, you could still need to get extra coverage, such as workers’ compensation insurance, separately.
Generally, companies with a higher risk of incurring liability claims may benefit more from a standalone General liability policy. On the other hand, companies with lower risk levels may find a BOP to be a more comprehensive and cost-effective alternative.
In conclusion, a BOP and general liability insurance are both crucial business safeguards. Consider your budget, any legal requirements in your state or sector, and your business’s specific risks and demands when determining which coverage to purchase. An insurance specialist may be able to assist you in understanding your choices and helping you come to the best selection for your company.
