General Liability Insurance vs. Business Owners Policy (What's The Difference?)

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General Liability Insurance vs. Business Owners Policy

General Liability vs. BOP

General Liability Insurance vs. Business Owners Policy. Every business owner understands the importance of obtaining insurance to protect themselves and their company. However, which type of policy they need is not always clear. For liability coverage, you have the option of getting a business owners policy (BOP) or commercial general liability coverage for your business. The decision depends on just how much coverage you want, what type is most important to you and how much money you're willing to spend.

So does your general liability or does your business owners policy cover it? Read on to find out as we explore the differences and similarities between general liability insurance vs. business owners policy..

General liability insurance vs. business owners policy - learn which policy covers what and if you need one or both for your business.

What Is General Liability Insurance?

General liability insurance vs. business owners policy: General liability is typically used for an action that causes damage: bodily and/or physical. If you, or someone in your business, or your business causes someone bodily damage, then general liability will cover you. Likewise, if you or someone in your business causes physical damage to something, general liability insurance will cover you. General liability insurance will cover the costs of defending or investigating a suit or claim against you.

General liability policies are sold either as a stand-alone policy or as part of a package. Because of their large size and complicated nature, large businesses need stand-alone policies risk to properly insure their liability exposures. Small businesses, on the other hand, are less complicated and have smaller exposure and can make do with a BOP, which includes property, general liability, crime and non-owned and hired car coverage.

What Is A Business Owner's Policy?

A business owner's policy is a package of the multiple commercial insurance coverages that are necessary for a business. A BOP will include a general liability policy within the package, but also provides other coverages that should protect common losses that a business could potentially face. A business owner's policy can offer the following benefits:

  • Better price on total insurance cost.
  • Convenience of working with one broker for all your business insurance needs.
  • Many extra coverages for many risks your business faces.

How General Liability & BOPs Are Alike

General liability insurance vs. business owners policy: GL and BOP insurance are both similar in that they protect cover you, your business, and employees from any liability that they might face with regards to a third party who wants to make a claim for property damage or personal injury they experienced. These coverages protect you from risks with regards to your responsibility to your customers and to people your business comes into contact with.

Both types of insurance allow you to add more coverage. For example general liability insurance allows you to add additional coverages such as employee theft, employee auto business liability, and many other business risks that owners encounter and use endorsements to add coverage to their CGL policy.

The majority of business owners policies also offer additional basic coverages on top of property and liability coverage, for example, commercial crime (robberies or safe burglary), in addition to employee dishonesty insurance (thievery or embezzlement made by staff members), external business advertising signs, and also income losses because of covered loss, also referred to as business interruption.

Both policies do not cover:

  • Ownership of vehicles - They do not cover any claims arising out of the ownership of an automobile or a watercraft.
  • Professional services - They do not cover the business from liability issues resulting from rendering or failure to render professional services. Often times a professional service is defined as a work or service in which a person needs special training to perform

How General Liability And BOP Insurance Differ

General liability insurance vs. business owners policy: Not every business has access to a business owners policy because of the unique exposures that a particular business might have. A business owners policy is designed to address the needs of low risk businesses in an easy to purchase format.

As an example, BOPs aren't typically available to certain contractors, manufacturers, bars and taverns, and other businesses that are considered to have above-average risk. It's important talk to an independent insurance agent about whether or not a business owners policy is a good fit for your business.

A BOP is only designed for small and medium-sized businesses. Additionally, the business must require a year or less of business interruption insurance.

A general liability policy only provides legal defense and insurance protection in the case of bodily injury or damaged property. On the contrary, BOPs also cover claims for damage to property you own or the property of others you may have in your care, custody or control. Should unforeseen events force a business owner to stop business operation for a short period of time, this policy compensates for lost income as well.

A BOP can reduce your insurance rates. You'll receive multiple coverages at a rate lower than you'd pay if you purchased each policy individually.

BOP Versus General Liability

They size, scope and class of your business determines if you qualify for a BOP or general liability or commercial package policy.

Read More Insurance Comparison Articles

Learn about the differences between certain types of commercial insurance to help you find the right policies for your company.


Business insurance can be confusing, especially when you are looking to get specific types liability insurance. The differences between general liability and professional liability are common misunderstandings. We have also found that many people confuse their contractual needs for general and auto liability.


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