A business owner's policy (BOP) is essentially a general liability insurance policy with additional property protection. It bundles several insurance policies into one package at a reduced rate. General liability insurance can cover basic risks, such as bodily injury and damage to someone else's property. It also covers allegations of defamation and slander.
We help you navigate the insurance world with expert advice and all the up-to-date information you need to make the best insurance decisions for you, your family and your company. After a waiting period, if your BOP or commercial general liability policy includes an extension of business interruption coverage, the insurance company may cover part of your losses. Also called “slip and fall insurance” or “general commercial liability insurance” (CGL), it can help cover some of the most common accidents that can occur in any company, such as damage to a person's property or injuries to a customer. Many professional services that require certification or licensing require proof of insurance or a bond, while sellers or landlords may demand liability when renting space.
In addition to the liability coverages mentioned above, a BOP covers the building (if owned by the company), as well as the company's personal property coverage. There is also a form of the BOP designed for home-based businesses that, like a traditional BOP, covers general liability and property coverage. General liability insurance protects your company by managing financial obligations that may arise when your company's negligence causes injury or property damage. Let's say your company is painting the exterior of a house and a bystander stumbles upon equipment that improperly blocks the sidewalk.
Looking at the list above, you might think that a business owner's insurance covers almost all risks. The BOP is a good solution for service-based businesses (such as technical, professional, financial, or personal care companies), retail stores, and small restaurants and coffee shops. The decision to buy a CGL instead of a BOP can depend on several factors, such as the complexity of your operations, whether or not you have real estate, and the level of customization needed to cover your company's individual risks. In many cases, a CGL, combined with the right commercial property and auto policies, may be the best solution for an entity's insurance needs (for more information on auto policies, see The Ultimate Guide to Auto Insurance).
In addition to being a smart way to protect your business, general liability insurance is sometimes required to obtain a business license or rent commercial property. General liability protects your company when processing claims for third-party bodily injury, property damage, and advertising-related damage. The general liability policy and the business owners policy (BOP) are insurance policies that offer protection by reducing the costs associated with a claim, and both policies can be customized with endorsements. This helps your company pay for lost revenues and running expenses when a covered event forces you to pause operations.
In addition, this coverage usually has a monetary or temporary limit.