General Liability and the Business Owner’s Policy: Which Does Your Small Business Need?
Your answer depends on what you own, who works for you and what your contracts require; general liability answers claims by others, and a BOP packages typical coverages.
This article is general information about how insurance usually works. Your policy’s own wording decides what it covers. Ask us about yours.
Short Answer
General liability does not respond to your own property, your employees’ injuries or your professional advice, which commercial property, workers’ compensation and professional liability address. A personal auto policy generally excludes business use, so commercial auto is the coverage to ask about for business vehicles. If a contract requires proof of insurance, check which lines of coverage it names.
What General Liability Covers
It protects against financial loss from bodily injury, property damage, medical expenses, libel, slander, defending lawsuits, and settlements or judgments.
Which Coverage Answers What
- Your own property.
- Commercial property insurance protects company property from events such as fire, smoke, wind and hail, and vandalism.
- Your employees’ injuries.
- Workers’ compensation covers an employee’s work related injury or illness.
- Your professional advice.
- Professional liability insurance covers malpractice, errors and negligence for businesses that provide services.
- Your vehicles.
- A personal auto policy generally excludes business use, so commercial auto insurance is the coverage to ask about.
What a Business Owner’s Policy Adds
A business owner’s policy combines the typical coverage options into one bundle. The exact package depends on the policy, so read the wording for what it provides for your property, your liability and any loss of income.
Questions to Ask About Your Own Coverage
- If you own equipment, inventory or a building, commercial property insurance is the coverage to ask about.
- If you have employees, workers’ compensation insurance is the coverage to ask about.
- If your vehicles perform business work, commercial auto insurance is the coverage to ask about.
- If you provide professional advice or services, professional liability insurance is the coverage to ask about.
- If a contract requires proof of insurance, check which lines of coverage it names.
If your business does not fit a package, the same coverages can be arranged individually, and we represent you, not a single insurance company.
Frequently Asked Questions
What is the difference between general liability and a business owner’s policy?
General liability covers claims from other people. A business owner’s policy packages the typical coverage options into one bundle.
Does general liability cover my equipment?
Generally, no. Commercial property insurance protects company property.
Does a business owner’s policy cover my employees’ injuries?
Workers’ compensation is the line of coverage for an employee’s work related injury or illness. Ask whether your package includes it or whether it is a separate policy.