When it comes to insurance coverage, it’s crucial to know the difference between a business owner’s policy, also known as a BOP for short, and general liability insurance. While both have one thing in common, there are several differences that make the two distinct. Understanding that, as well as why it’s important to have the right insurance policies and amounts, will help you keep your business properly protected. Here’s what you need to know.
What’s a Business Owner’s Policy?
A business owner’s policy is a handy way of combining two important insurance policies that practically every small business needs: a general liability policy and a business insurance policy. What does each cover?
Business Insurance – Your business insurance policy protects your building, lot, and just about everything inside of the structure, except for things that may need specialty policies, like certain types of equipment. If something happens to the building, such as storm or fire damage, this is the insurance policy that can help you rebuild without having to pay a lot of money out of pocket.
General Liability – On the other hand, a general liability policy is designed to cover situations where your business may be liable for injuries and accidents that don’t happen to a direct employee. For example, if a client arrives to sign a new contract and they slip on ice in your parking lot, breaking their leg, your company may be the ones who have to pay their medical bills. General liability insurance may help with these costs.
Since a BOP includes both type of insurance, it holds more use for the average small business owner. You get both policies at once and won’t have to worry about paying for multiple policies, each due at a different time.
What About General Liability Insurance?
As you can imagine, general liability insurance by itself is the same as described above. It covers those important situations where the company is liable for something. However, the policy is all by itself, not automatically bundled with a company building or property insurance option. That’s what the key difference is: one is a policy by itself, while the other, a BOP, is a combination of two different policies.
Which One Do You Need?
The answer to this question depends on numerous factors. Does your company own, lease, or rent a building? If so, then you probably need a BOP, or business owner’s plan. However, if your business is mobile or located in a different building, like the basement or home office in your house, you may only need a general liability policy that’s bundled with other relevant options.
Contact Spivey Insurance
If you’re ready to purchase a business owner’s policy (BOP) or a general liability policy to protect your company, please reach out to us at Spivey Insurance. Our knowledgeable agents can answer any questions that you may have, as well as help you find the right policies to protect your business.