Whether we talk about general liability or business owner’s policy, both aim to provide protection. The protection is for small businesses, but how are you going to decide which one is better for you? Well, you can select it by taking a closer look at the various aspects of these policies. This article covers full details on general liability vs. business owner’s policy to give you an insight into both of them.
What Is General Liability?
With general liability insurance, you will get coverage for costly claims. These situations arise during normal business operations. In case you don’t have general liability insurance, you have to pay for all this on your own. Multiple businesses are not capable of payment during tough times. So general liability comes into the picture in such cases.
General liability is a policy that works when one of these issues arise:
#1: Third-party property damage
Suppose your business functions in such a manner that the employees work at the client’s house. There is a possibility that they damage their property while working. So eventually, the whole burden of repairing a client’s property damage comes to you. That’s when general liability helps you.
#2: Third-party bodily injury
If a customer visits your business location and suffers from an injury, he or she can sue you. General liability covers you for bodily injury so you can handle medical bills.
#3: Reputational harm
For clients, their reputation comes first, and rest comes after that. If you damage their reputation unknowingly, then they may sue you. General liability helps cover the cost of legal stuff to defend your business.
#4: Advertising Injury
Your business will suffer a considerable loss if someone sues you due to a slight mistake in advertising. We are talking about copyright infringement. If you use someone else’s work to promote your business, it will pose a problem for you. With this coverage, you can deal with it.
We hope the general liability part is clear to you. Let us now move on to understand the business owner’s policy.
What Is Business Owner’s Policy?
A business owner’s policy is a single insurance package that is a combination of liability risks and major property protection. This is general liability vs. business owners’ policy in one line. So a business owner’s basic needs are assembled to form a complete package of benefits. If you buy these coverages individually, then it is costlier than this bundle together.
A business owner’s policy is going to offer multiple insurance products in one package. Small and medium-sized businesses are generally the target of this type of policy. If we discuss the primary coverages, then it is for the property, liability, and business interruption. Your business must meet the requirements of the insurance company to avail of its benefits.
#1: Property Insurance
For property insurance coverage, you will get named-peril coverage. It means a list of coverages that come under your policy—for example, property damage due to fire explosion, wind damage, smoke, or more. If you apply through a special business owner’s policy form, then you will get open-peril coverage. In such a case, the policyholder receives all-risk coverage.
Properties that come under the business owner’s policy are usually buildings. These could be your own or on rent. It could include outdoor fixtures too. The BOP will provide coverage for personal business items or the ones that a third party owns but kept at your workplace. One condition that you must note is that business items must be in the qualifying area or premises.
#2: Business Interruption
The business interruption insurance that comes under the business owner’s policy has another set of benefits. It provides coverage if there is a loss of income from a catastrophe or fire. Sometimes the insurance companies also bear the expenses of temporary operation of the business till the location recovers.
#3: Liability Protection
Business owner’s policy has one more protection, and that is liability protection. So the insurance company will handle the legal responsibilities for damages that the insured person may inflict on others. It could be something that occurs while your regular business work is going on. For example, the machinery has some fault due to which one of your employees suffers from bodily injury.
A business owner’s policy sometimes comes with additional benefits like crime insurance and flood insurance. Depending on your business location, you can discuss with your insurance companies about the same. They will offer you additional coverage by charging an extra amount. For crime insurance, you may get full coverage or specific ones like theft. The BOP does not cover worker’s compensation or professional liability, so buy a separate one for it.
How Different Business Owner’s Policy is from General Liability?
Firstly, a business owner’s policy offers a bundle of multiple insurance products. If you are looking for a policy that saves your money by offering all you need in one package, BOP is for you. You must explore the insurance market to check for it yourself. Ask your insurance agent for the price of these insurance products individually. After that, compare it with the BOP. You will find a business owner’s policy of more benefit.
Secondly, the business owner’s policy is not for all business owners. It means you must meet a particular set of requirements so that you qualify for this policy. It is mainly for low-risk businesses. General liability, on the other hand, is available to all companies. For example, you run a business like that of construction. Here, there is a high risk involved. So business owner’s policy won’t approve of you. You can then purchase general liability insurance. It will protect your business against a few liability exposures.
We hope general liability vs. business owner’s policy is clear to you now. In case you still have queries on any of these policies, then you can contact us. Leave us your question in the comment section, and we will get back to you as soon as possible.