What is the Difference Between Liability Insurance and Business Insurance?

General liability insurance is designed to protect businesses from claims that indicate that their operations have caused bodily injury or property damage. It can also provide coverage if someone sues for a publicity injury. Commercial property insurance, on the other hand, covers the physical location and equipment of a business, whether it is owned or leased.

Business owner policies (BOP)

and general liability insurance are two types of commercial insurance that offer similar protection against liabilities.

For small business owners, selecting the right type of insurance can be a daunting task. A business owners policy, or BOP for short, is a comprehensive insurance package that combines the most essential general liability, commercial property and business interruption policies into one convenient plan. There are many similarities between general liability coverage and BOP coverage. For instance, if you take out a BOP, you won't need to purchase a separate general liability policy since it is already included in the BOP.

You also have the option to customize both policies. If you have general liability insurance or BOP, you can add endorsements for product liability coverage, commercial auto insurance, or alcoholic beverage liability coverage. Another difference between the two is that BOP isn't available to all types of business owners. Insurance companies generally offer coverage to small and medium-sized businesses with low risk.

A BOP provides additional coverage in addition to general liability. Suppose you want insurance for damage or loss of your building, equipment, and inventory. In that case, a BOP makes sense as it generally offers more protection at a lower cost than buying each policy separately. Keep in mind that general liability insurance is usually cheaper than BOP because it covers fewer scenarios but also offers less coverage in case something happens.

It is important to note that commercial property insurance is different from commercial auto insurance which covers damage to vehicles owned by your business. If you need collision coverage for your cars, trucks, or other commercial vehicles, look for a commercial auto insurance policy. Insurance brokers may refer to it as errors and omissions insurance and it can help cover errors in the services your company provides. This misunderstanding can cause business owners to miss out on important and useful insurance coverage.

When you're a business owner (or a sole owner), it's often legally mandatory to have commercial insurance just like people need health insurance, home insurance, and car insurance. The information on the Site does not alter, supplement or modify in any way the terms, conditions, limitations or exclusions of the applicable insurance policy and is only intended to be a brief summary of that insurance product. Depending on the terms, a professional liability insurance policy can also help cover privacy violations that may threaten your business. You've probably bought insurance for things like personal car insurance, home insurance, or life insurance policies.

Business owners policy and general liability insurance cover similar types of losses and injuries so they may seem interchangeable at first glance. It can be confusing to know which commercial insurance policy is mandatory or beneficial for your business. An experienced broker can help you manage the cost of insurance and find a customized commercial insurance plan that fits your budget. Some business owners may be under the impression that they need one type of insurance or another which can be confusing.

Even the most careful business owners could face these claims so this coverage is considered the cornerstone of any business protection plan. Your insurance agent can help you purchase workers' compensation from a licensed insurance company and help you with information about the State Fund and self-insurance.

Jenny Kizzia
Jenny Kizzia

Professional food ninja. Proud coffee expert. Friendly pop culture guru. Certified beer buff. Beer scholar.