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General Liability vs. Business Owner's Policy

You can save with discounts of up to 25%.*

When comparing general liability insurance vs. a business owner’s policy (BOP), you’ll find some significant overlap in terms of what’s covered. However, there are key differences that are important for business owners to understand.

To help you make the best choice between general liability or business owner’s policy insurance policies, we’ll walk you through the differences and similarities between these types of coverage.

 

What’s the difference between General Liability and Business Owner’s Policy?

General liability insurance is one the most common types of insurance policies for small business owners and self-employed professionals. It helps pay for medical payments and property damage if someone other than an employee gets hurt or if your business is held responsible for damaging someone’s property.

A business owner’s policy (or BOP insurance) includes general liability insurance. However, a BOP goes a step further by also including commercial property insurance.

It’s a combination of general liability and the following commercial property coverage:

Essentially, the key difference between a business owner’s policy vs. commercial general liability is a BOP helps pay for a wider variety of possible accidents and risks that a business is exposed to.

 

Does a BOP include liability?

You can think of it this way: General liability insurance only covers certain liability losses. BOP covers those same liability and some losses to property that your business owns.

 

What is General Liability insurance?

General liability insurance covers a wide range of risks that many small business owners face every day.

Sometimes referred to as “slip and fall” insurance or commercial general liability (CGL), it can help cover some of the most common accidents that can happen at any business, like damage to someone’s property or customer injuries. It can also provide financial protection if you’re accused of slander or libel.

What does General Liability insurance cover?

General liability insurance helps protect you from unexpected expenses when you’re held responsible for an accident at your business, including:

  • Physical injury: General liability insurance can help cover expenses related to physical harm caused to someone other than you or your employees. This is also called “bodily injury.”
  • Property damage: This can cover damage to property belonging to someone else up to your policy limits.
  • Personal injury: This insurance can cover damage to a party’s name or reputation. Libel, slander and defamation fall into this category, which is also known as “advertising injury.”

Learn more about general liability insurance coverage.

Who needs General Liability insurance?

Almost every business can experience the types of accidents that general liability insurance covers. Most business owners get general liability insurance to make sure they’re covered for these basic risks.

Besides being a smart way to protect your business, general liability insurance is sometimes required to get a business license or rent commercial property. Additionally, some clients may require you to have this coverage before they agree to work with you.

The following examples show how different types of business owners can benefit from general liability coverage:

  • Some contractors need general liability insurance to meet the license requirements in their state.
  • Clients often require house cleaning services to have general liability coverage before they hire them.
  • A retail business that wants to rent a commercial space may have to provide proof of coverage before signing a lease.

How much does General Liability insurance cost?

General liability can cost as little as $11 monthly or $128 annually for some businesses, but a number of factors — such as where your business is located, how many employees you have and the type of work you do — affect the exact price you’ll pay.**

What NEXT customers typically pay for General Liability insurance

At NEXT, 50% of our customers pay between $25 or less to $45 per month for general liability insurance. Businesses with a higher level of risk generally pay more than those with low-risk levels.**

 

What is a Business Owner’s Policy?

A business owner’s policy (BOP) is actually a bundle that includes two types of business insurance: general liability insurance and commercial property insurance.

In addition to covering the same type of risks as general liability, like customer injuries and damage to someone’s property, it also covers events that affect equipment, inventory and the physical location of your business.

One of the key advantages of a business owner’s policy is that it saves money. Bundling two types of insurance into one package costs less than buying them separately.

What does a Business Owner’s Policy cover?

With BOP coverage, you’ll get general liability and commercial property coverage to help protect your business finances.

General liability insurance can cover basic risks, like bodily injury and damage to someone else’s property. It also covers accusations of libel and slander.

Commercial property insurance can cover accidents involving business goods, gear, equipment and inventory. It can include business interruption insurance if your business is forced to close due to an event coverage by your policy .

 

Who needs a Business Owner’s Policy?

Many businesses can benefit from having a business owner’s policy. Because it includes two types of insurance, it offers more coverage, usually with the added advantage of a lower price for bundling the policies together.

Regardless of what line of work you’re in, there’s a good chance that you could benefit from a BOP. Here are just a few examples from different professions:

  • A customer trips over uneven flooring in a coffee shop and gets hurt. General liability insurance can cover expenses for medical bills and lawsuits.
  • High-value equipment is stolen from a construction site overnight. Commercial property insurance can help cover replacement costs.
  • A fire causes significant damage to a beauty salon. Commercial property coverage can pay for costs to fix the damages and lost income while the salon is closed for repairs.

How purchasing a Business Owner’s Policy can save you money?

NEXT customers automatically save up to 10% when choosing a BOP rather than purchasing general liability and commercial property insurance separately.

 

How do General Liability and a Business Owner’s Policy insurance overlap?

Most businesses need general liability insurance to protect against unexpected expenses involving customer injuries and damage to someone else’s property. Whether you choose a stand-alone general liability policy or a business owner’s policy, you get that coverage.

When comparing a business owner’s policy vs. general liability insurance, you can expect similar coverage for these types of risks:

  • Bodily injury
  • Property damage
  • Libel and slander

While both types of insurance help cover expenses related to unforeseen accidents, a business owner’s policy offers more protection because it also includes commercial property insurance.

Similar restrictions apply with both a BOP and general liability insurance, such as:

  • Only covering accidental damage, not intentional damage. You won’t be covered if you attack someone or knowingly cause harm.
  • Restricting coverage to a specific area. If you go outside your “coverage territory,” you won’t have the same protections.
  • Covering injuries to third parties only. To get coverage for injuries to you and your employees, you’ll need workers’ compensation insurance.

 

Do I need both General Liability and a Business Owner’s Policy?

No. Since a business owner’s policy includes general liability insurance, you won’t need both. Instead, you’ll just need to decide which option makes the most sense for your business.

General liability is recommended for most businesses. But not all businesses need a BOP.

Generally, a business owner’s policy may be a good fit for your business if you:

  • Interact with customers and the public
  • Run your business out of a physical location that you lease or own
  • Have equipment or inventory that could get stolen or damaged
  • Would have to shut down operations if your property is stolen or damaged

Read more about how to know when a business owner’s policy (BOP) is right for you.

 

How NEXT helps small businesses get coverage

At NEXT, we want you to be able to operate your business with confidence by knowing that you’re covered even if the unexpected were to happen.

Our small business insurance options are convenient and affordable.

We can set you up with a customized insurance package tailored to your needs. In addition to general liability insurance and business owner’s policies, we also offer workers’ compensation insurance, professional liability insurance, tools & equipment and product liability insurance to cover your business.

If you’re not sure whether general liability insurance or a BOP is right for you, we’re here to help.

Simply start a quote, answer a few questions and we’ll provide coverage recommendations. You can do everything 100% online in about 10 minutes, and you can get a certificate of insurance instantly.

Get your instant insurance quote today.

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Let’s find the coverage you need for your business

Business insurance is divided into different policies. We offer seven types so it's easy to design the coverage that fits your business.

General Liability insurance
General Liability

Protect yourself from accidents that cause physical injury or damaged property.

Professional Liability or Error and Omissions Insurance
Professional Liability/E&O

Shield yourself from lawsuits that claim your work errors caused financial losses.

Workers' Compensation Insurance
Workers’ Compensation

Cover medical bills and lost wages if your employees have an accident at work.

Commercial Auto Insurance
Commercial Auto

Stay on the road with coverage for dents, tows and damage to someone else’s vehicle.

Tools & Equipment Insurance
Tools & Equipment

Upgrade your general liability coverage to protect any gear that’s stolen, damaged or lost.

Commercial Property Insurance
Commercial Property

Keep your building, inventory and equipment protected from fire or water damage.

Business Owner’s Policy Insurance
Business Owner’s Policy

Combine general liability and commercial property into one policy to protect your business.

Take a look at some helpful blog posts
How to know when a Business Owner's Policy (BOP) is right for you
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How to know when a Business Owner's Policy (BOP) is right for you

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Why businesses need more than one business insurance policy

4 real-life examples when liability insurance can save your business
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4 real-life examples when liability insurance can save your business

* To the extent permitted by law, applicants are individually underwritten, not all applicants may qualify. Individual rates and savings vary and are subject to change. Discounts and savings are available where state laws and regulations allow, and may vary by state. Certain discounts apply to specific coverages only.
** The cost data presented here are based on NEXT active customers in the U.S. who purchased general liability insurance over the previous 12 months. These data should not be considered a substitute for obtaining a quote specific to your business. These data were updated in July 2022.
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