So you’re on the hunt for adequate small business insurance. But now you see two avenues to get the basic liability protection your business needs: you could go with a standalone General Liability Insurance policy or you could see if you qualify for a Business Owner’s Policy. What do you need to know to make an informed decision?
Consult this one-sheet for a quick rundown on the benefits of each policy and how they differ. Then you’ll be able to decide which one offers you the financial protection that fits your needs. (Always contact your Insurance Advisor with questions)
What Is General Liability Insurance?
General Liability Insurance offers a blanket of liability protection against a few common torts small-business owners may face. It kicks in when a third party (i.e., anyone who doesn’t work for your business) sues you over…
- Bodily Injuries they suffered on your commercial premises.
- Property Damage you caused while doing your work.
- Advertising / Personal Injuries (e.g., slander, libel using someone’s image without their permission or copyright infringement).
In response to these claims, General Liability compensates you for attorneys’ fees, court costs, and settlements or judgments (depending on your policy limits). Keep in mind that even the most careful business owners could face these claims, which is why the coverage is considered the cornerstone of any business protection plan.
What Is a Business Owner’s Policy?
A Business Owner’s Policy (BOP Insurance) is essentially a high-octane General Liability Insurance policy. It takes a couple insurance policies and bundles them into one convenient package at a reduced annual rate. A BOP typically includes…
- General Liability Insurance (described above).
- Property Insurance which compensates you for insured business assets that are lost or damaged by fire, theft or windstorms to name a few).
- Business Interruption Insurance which reimburses you for lost income when a covered property event forces you to temporarily halt business operations.
Though a BOP is a comprehensive and affordable option, it’s not available to all business owners. To qualify for this coverage, you must…
- Own a small business (which means your premises are small and you don’t have a lot of employees).
- Work in a low-risk industry.
- Not need more than 12 months of Business Interruption coverage.
How General Liability and BOP Insurance Are Alike
As you can see, there is some common ground between General Liability and a BOP. Let’s recap:
- Both policies offer basic liability protection. A standalone GL policy and a BOP protect your small business from premises liability, property damage liability, and advertising liability claims. Remember, if you do purchase a Business Owner’s Policy, you won’t need a separate General Liability policy.
- Both policies can be customized through endorsements. Do you need Product Liability to address lawsuits when the products you create or sell physically harm someone? Do you drive a vehicle for work purposes and need Commercial Auto Insurance? Do you own a restaurant that sells booze and need Liquor Liability Insurance? These additional coverages can be added to either a BOP or a General Liability policy.
How General Liability and BOP Insurance Differ
Here’s a quick outline of how a standalone General Liability policy and a BOP are unique:
- BOPs are not available to all business owners. As noted above, you have to meet certain criteria to be eligible for the bundle. Namely, BOPs are only offered to small-business owners. By contrast, General Liability Insurance is available to most business owners. For example, if you work in construction, you may not be eligible for a BOP because your industry is considered “high risk.” However, a standalone GL policy would be able to protect a construction business from its liability exposures.
- A BOP can reduce your insurance rates. If you’re looking to save money on small business insurance, a BOP should be the first place you look. You’ll receive multiple coverages at a rate lower than you’d pay if you purchased each policy individually.
Cara Insurance Agency
For help finding the right Business Insurance, please contact us. At Cara Insurance Agency, our only goal is to insure you’ve got the best coverage for your businesses needs. Give us an opportunity to earn YOUR business. You’ll be glad you did.
Reach us direct: 949-679-1032