Purchasing insurance as a business owneris more complex than it seems. Some types of business insurance, such as general liability insurance and business owner’s policies, are similar as they provide basic protection for small businesses.
However, there are some distinct differences to consider. It is important to examine the differences between the two to determine which is better suited for a particular business.
What Is General Liability Insurance?
General liability insurance (GLI), also referred to as commercial general liability insurance (CGL), is a type of coverage that protects a business against claims of bodily injury or property damage.
GLI can be purchased as a standalone policy or bundled with other essential business policies, such as a business owner’s policy (BOP). Nearly every business, regardless of size, has a need for general liability insurance.
What Does General Liability Insurance Cover?
General liability insurance protects against costly claims that may arise during normal business operations. A GLI policy may help cover claims associated with the following:
- Third-party bodily injury: If a customer is injured in the business, they could sue for damages. GLI provides bodily injury liability coverage to cover medical bills.
- Third-party property damage: If an employee causes property damage at a client’s home, the business could be liable for damages. GLI helps pay for repair or replacement costs.
- Advertising injury: Businesses can be sued for copyright infringement, such as when a photographer’s photo work product is used without permission. GLI covers advertising-related lawsuits.
- Reputational harm: An individual could sue a business for libel or slander due to something an employee said. If this occurs, GLI can help cover the resulting legal expenses.
Who Needs General Liability Insurance?
Many types of businesses can benefit from having general liability insurance, such as consultants, janitorial services, artisan contractors, IT contractors, real estate agents, landscaping companies, and small business owners.
Any business that is open to the public, caters to clients or vendors, advertises, uses social media professionally, or uses third-party locations for business activities should have general liability insurance.
What Is a Business Owner’s Policy?
A business owner’s policy (BOP) combines business liability insurance and business property insurance into one convenient policy. With BOP insurance, business owners can protect against various claims resulting from theft, fire, and other covered disasters.
Similar to general liability insurance, a BOP covers claims that could arise during normal business operations, such as bodily harm and property damage. BOPs also offer coverage for personal and advertising injuries.
What Does a Business Owner’s Policy Cover?
A standard business owner’s policy includes several essential types of coverage, including the following:
Commercial property insurance: This type of coverage protects a business’s building, inventory, and equipment.- General liability insurance: Helps cover any medical expenses that may result from bodily injuries and property damage for which the business may be liable.
- Crime Insurance: Crime coverage helps protect a business from theft, fraud, and forgery.
- Business Income: This type of coverage helps pay bills and employees if the business is forced to close temporarily.
A BOP may also include additional coverage options, such as:
- Cyber liability
- Accounts receivable
- Equipment breakdown
- Rented vehicles
- Personal and advertising injury
- Employment practices liability
Who Needs a Business Owner’s Policy?
Many types of businesses can benefit from obtaining a business owner’s policy, such as contractors, healthcare professionals, financial services, commercial real estate, publishers, manufacturers, retail, food services, pet care services, wholesalers, religious organizations, technology services, and service businesses.
A BOP benefits those businesses located outside of the owner’s home, those with fewer than 100 employees, those with equipment or property that they want to protect and businesses with less than $5 million in annual sales.
How Does General Liability Insurance Differ from a BOP?
General liability insurance and business owner’s policies cover many of the same types of injuries and losses; however, they are not the same.
While general liability coverage includes advertising claims, damage to a customer’s property, and bodily injury, a BOP includes general liability, property insurance, and equipment and business interruption coverage.
A business owner’s policy may not be suitable for every type of business. Insurance companies typically offer business owner’s policies to small and medium-sized businesses deemed low-risk.
Request an Insurance Quote from Atlas
If you own a small business, getting the insurance you need to protect your investment should be a simple process. The experienced insurance agents at Atlas Insurance Agency offer a variety of business insurance products to protect organizations from a range of risks and liabilities.
To learn more about the difference between general liability insurance and business owner’s policies, or to request an insurance quote for a BOP, contact Atlas Insurance Agency at (808) 400-6634.