Business Owner’s Policy vs. General Liability
General liability insurance protects businesses against certain types of claims made by customers and clients. When shopping for general liability coverage, you have the option of purchasing it as a standalone policy or as part of a business owner’s policy (BOP).
A business owner’s policy bundles general liability insurance with commercial property and business income insurance to provide small businesses with the essential coverages they need at an affordable rate.
Here’s everything you need to know about a business owner’s policy vs general liability.
What is General Liability Insurance?
General liability insurance protects businesses against claims of bodily injury and property damage that your business causes to a third party.
General liability insurance can help cover expenses like medical bills, legal defense fees, and settlements if a client makes a claim against your business. Businesses that don’t carry general liability insurance may have to cover these expenses out of pocket, which can be devastating for small businesses that don’t have the cash flow to survive such a financial blow.
This type of coverage can be purchased as a standalone policy or as part of a BOP. When purchasing general liability as part of a BOP, small businesses also receive commercial property coverage and business income insurance at a discounted rate.
What does it cover?
General liability insurance can help cover medical bills and legal costs that result due to claims of:
- Bodily injury
- Property damage
- Advertising injury
- Reputational harm
Keep in mind that general liability insurance only covers damages that your business causes to a third party. It does not cover damage to your own company’s property or employee injuries.
How much does it cost?
The cost of general liability insurance can vary significantly depending on several factors, including:
- Location
- Industry
- Number of employees
- Business experience
- Claims history
- Number of customers or clients
Generally speaking, businesses tend to pay between $40 and $50 per month for general liability insurance, which is a small price to pay for the protection that it offers. To learn more about how much general liability insurance costs, request a quote.
What is a Business Owner’s Policy?
A business owner’s policy packages several business insurance policies together to give small businesses access to affordable coverage. This includes general liability, commercial property, and business income insurance. Bundling these policies together helps small businesses save money without sacrificing important coverage.
In addition to the standard coverage, BOPs can be tailored to your business’ needs by adding optional endorsements. This may include professional liability insurance, commercial auto insurance, data breach coverage, and workers’ compensation insurance.
What Does it Cover?
A typical BOP includes general liability insurance, commercial property insurance, and business income insurance:
- General liability insurance: Covers businesses against claims of bodily injury or property damage.
- Commercial property insurance: Covers business property against damages, including property that the business owns, rents, or leases.
- Business income insurance: Covers businesses if a covered peril forces their business to temporarily shut down. Can help cover expenses like lost income, payroll, and rent.
Together, these three coverages protect small businesses from many of the common risks they may face during normal business operations.
How Much Does it Cost?
Like general liability insurance, BOPs can vary in cost depending on several factors, including:
- Business size
- Type of business
- Location
- Number of employees
- Optional endorsements
- Coverage limits
- Claims history
A KSA Insurance agent will work with you to find a BOP that meets your financial and coverage needs.
Who Qualifies for a Business Owner’s Policy?
Not all businesses are eligible to purchase a business owner’s policy.
Insurance companies may have their own criteria to determine which businesses are eligible for a BOP, but generally, your business needs to have fewer than 100 employees and less than $5 million in annual revenue to qualify.
What Other Coverages Do Business Owners Need?
While a BOP provides several key coverages that protect small businesses against common risks, you still may need to purchase additional coverages to ensure your business is completely protected.
Other coverages small businesses should consider include:
Request a Quote
A business owner’s policy bundles several important small business insurance policies, including general liability insurance, into one affordable package.
At KSA Insurance, we work with small businesses in South Carolina and the southeastern United States to help them find comprehensive business owner’s policies that protect their businesses against common risks.
Contact us today to get a quote and learn more about business owner’s policies.
