Two of the most common commercial policies — and most business owners don't know the difference. Here's what each covers, what it doesn't, and when you need both.
General liability (GL) is the foundation of commercial insurance. It covers third-party bodily injury, property damage, and personal/advertising injury. If a customer slips in your store, if your work damages someone's property, or if you're sued for slander — GL responds.
What it doesn't cover: your own property, your own injuries, or professional mistakes. It's protection against what you do to others, not what happens to you.
A Business Owner's Policy bundles general liability with commercial property insurance into a single policy. It covers your building (if you own it), your business personal property (furniture, equipment, inventory), and business interruption — the income you lose if a covered event forces you to close temporarily.
BOPs are typically designed for small to mid-size businesses with a physical location. They're often more cost-effective than buying GL and property coverage separately.
If you're a service-based business that works at client locations — a contractor, a cleaning company, a mobile mechanic — you may not need property coverage. You don't have a storefront, significant inventory, or expensive office equipment. In this case, standalone GL (possibly paired with workers' comp and commercial auto) makes more sense.
If you have a physical location — a retail store, a restaurant, an office, a salon — a BOP is almost always the right starting point. The property coverage protects your space and contents, and the business interruption component covers lost income if a fire, storm, or other covered event shuts you down.
The cost difference between standalone GL and a BOP is often modest, so if there's any doubt, the BOP gives you more protection for marginally more premium.
GL protects you from liability to others. A BOP protects you from liability to others AND protects your own property and income. Neither covers professional errors (that's E&O), employee injuries (that's workers' comp), or vehicles (that's commercial auto).
The right answer depends on your business model, your physical footprint, and your risk profile. An independent agency can help you figure out which combination makes sense — without pushing you toward the most expensive option.
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