BOP vs. General Liability: Which Does Your Small Business Need?
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When shopping for commercial insurance, business owners are often faced with a confusing alphabet soup of acronyms and policy types. Two of the most common—and most frequently confused—are General Liability (GL) and a Business Owner's Policy (BOP).
Understanding the difference between the two is crucial for ensuring your business is adequately protected without overpaying for unnecessary coverage. Let's break down exactly what each policy does and how to choose the right one for your needs.
General Liability: The Foundation
General Liability insurance is the most fundamental commercial policy. It is often the first policy a new business buys because it protects against the most common everyday risks.
What General Liability Covers:
- Third-Party Bodily Injury: A customer slips on a wet floor in your shop.
- Third-Party Property Damage: You accidentally break a client's expensive vase while working in their home.
- Personal & Advertising Injury: Claims of libel, slander, or copyright infringement in your marketing.
What it DOES NOT cover: General Liability does not cover your own business property, your employees' injuries, or lost income if your business is forced to close.
The BOP: The Comprehensive Bundle
A Business Owner's Policy (BOP) is essentially an upgrade. It includes General Liability, but it bundles it with other essential coverages to provide broader protection for your physical assets and revenue stream.
What a BOP Covers:
- Everything in General Liability (Bodily injury, property damage, advertising injury).
- Commercial Property: Protects your building, equipment, and inventory from fire, theft, and vandalism.
- Business Interruption: Replaces lost income and pays ongoing bills if a covered disaster forces you to temporarily close.
Which One Do You Need?
Choose General Liability If:
- You are a freelancer, consultant, or independent contractor with no physical storefront.
- You don't own expensive business equipment or inventory.
- You rent a small office space where the landlord only requires GL coverage.
Choose a BOP If:
- You own or rent a physical commercial space (retail store, restaurant, large office).
- You own significant business assets, specialized equipment, or valuable inventory.
- A temporary closure due to a fire or storm would financially devastate your business.
Frequently Asked Questions
What is the difference between a BOP and General Liability insurance?
General Liability covers third-party bodily injury, property damage, and advertising injury. A Business Owner's Policy (BOP) includes General Liability but also bundles commercial property and business interruption coverage, protecting your physical assets and revenue stream in addition to liability claims.
Does a Business Owner's Policy include General Liability?
Yes. A BOP bundles General Liability with commercial property and business interruption coverage. If you purchase a BOP, you already have General Liability protection — you do not need to buy a separate GL policy.
Which is cheaper, a BOP or General Liability?
General Liability alone is typically less expensive because it covers less. However, a BOP often provides better value because bundling property and liability coverage is usually cheaper than buying each policy separately. The right choice depends on whether your business has physical assets to protect.
Still Unsure? Let the Experts Help.
Every business is unique. Our experienced commercial agents at TrueGuard can assess your specific risks and help you choose the most cost-effective policy to keep your business secure.