Business owners policy vs. general liability insurance
A business owners policy (BOP) and general liability (GL) insurance are two of the most common coverages for small businesses. Both offer liability protection if your company causes harm or damage to others, but BOP offers additional coverage for commercial property.
Progressive Commercial can help you decide whether a general liability policy or a BOP is right for your business. Our expert customer service, flexible options, and competitive rates make it easy to get the insurance you need.
What is general liability insurance?
General liability coverage is your business's first line of defense after unexpected accidents. Whether you're a one-person operation or a mid-size company on the rise, working with vendors, customers, or the public can open your business up to risks that could lead to costly claims.
Many small business owners choose general liability insurance because it helps pay for accidents or damage linked to their work. The following third-party protections are included in a GL policy:
- Bodily injury: Covers medical and legal costs if a non-employee gets hurt at your business or job site and decides to sue. It can apply to accidents like customer slip and falls.
- Property damage: Pays to repair or replace someone else's personal property or belongings if your business accidentally breaks it.
- Personal and advertising injury: Handles legal fees, judgments, and settlements for claims related to someone's reputation or rights, such as libel, slander, copyright infringement, defamation, or invasion of privacy. Learn more about personal and advertising injury coverage.
- Medical payments: Helps pay for medical or funeral expenses for non-employees if you're at fault for an accident.
- Products-completed operations: Protects your business from claims related to your products or completed services.
- Damage to rented properties: Covers repair costs if a building or space you're renting is accidentally damaged during business operations.
General liability insurance doesn't pay for damage to your own property. It also won't cover injuries to your employees. For that, you need workers' compensation insurance.
What is a business owners policy (BOP)?
A BOP combines commercial property insurance with the same liability protections you get on a GL policy. In addition to the coverages listed above, a BOP includes the following:
- Commercial property insurance: Protects the structure you own or lease and the physical assets inside if they get stolen, vandalized, or are damaged by other covered events. Assets include computers, furniture, tools, machinery, and stored inventory.
- Business interruption insurance: Provides support for lost income if your business is disrupted due to a covered event, like a hailstorm, theft, or vandalism. It can help with payroll, rent, loans, taxes, and relocation expenses while you recover.
Optional BOP coverages for added protection
With Progressive Commercial, you can customize your BOP with additional coverages. These optional endorsements add extra protection for things like:
- Cyber liability: Protects your data from things like cyber attacks or breaches.
- Equipment breakdown: Covers the cost to repair or replace equipment damaged by a covered event, such as an overloaded electric circuit.
- Employment practices liability: Addresses employee claims of discrimination, harassment, and wrongful termination.
- Tools and equipment: Pays to repair or replace gear that's stolen or damaged while being stored off site or moved between jobs. This coverage is also called inland marine insurance.
- Employee dishonesty: Protects you from employee theft or fraud.
- Miscellaneous professional liability: Covers legal fees if a customer claims your business cost them money by making a mistake, giving bad advice, or failing to deliver a service.
How to decide between a BOP or general liability
When comparing general liability to a business owners policy, the key difference is scope. Most businesses need liability protection in case of mishaps, but not everyone requires property coverage. A BOP is a good fit for many companies that have tools, equipment, and other physical assets to protect, while a GL policy might be more appropriate for a service-oriented company without buildings and equipment.
Professions that could be better suited to general liability, include:
A BOP, with its property coverage, is a good option for businesses and professions that need to protect expensive equipment and buildings, like:
Match your risk to a BOP or general liability policy
Take a look at your business setup to see which coverage fits. If you work from a set location or regularly use expensive equipment, a BOP offers broader protection. But if your risks mostly involve everyday business interactions, a general liability policy may be a helpful, cost-effective option.
Comparing BOP vs. general liability costs
General liability may cost less than a business owners policy, but BOP coverage might be a better value in the long term. Your business size, location, profession, claims history, and coverage needs determine how much you'll pay. These were the national median and average rates for new customers getting insurance through Progressive Commercial in 2024:
- General liability: $60 monthly median cost, $85 average monthly cost
- Business owners policy: $67 monthly median cost, $118 average monthly cost
Why choose Progressive Commercial for a BOP or general liability
Get insurance coverage you can trust through Progressive Commercial. We help protect businesses nationwide, offering competitive rates, fast online quotes, and expert support when you need it.
Start a quote or call to get covered with a BOP or general liability policy today.
