Business Owner’s Policy (BOP) vs. General Liability Insurance: What’s the Difference?
If you’re shopping for small business insurance, two terms you’ll probably encounter are General Liability Insurance and Business Owner’s Policy, or BOP.
They aren’t the same thing.
General liability is a specific type of coverage designed to protect against certain liability claims. A BOP packages multiple types of business coverage together.
Understanding that distinction can help you determine which approach may be appropriate for your Florida business.
What Does General Liability Insurance Cover?
General liability insurance addresses some of the most common liability risks businesses face.
Depending on the policy and claim, coverage can include bodily injury, property damage and legal defense.
Imagine a customer visits your office or store and is injured. Or perhaps your company performs work at a customer’s property and accidentally damages something.
Situations like these can lead to claims or lawsuits, which is why general liability is an important consideration for businesses across many industries.
Jupiter-Tequesta Insurance works with contractors, landscapers, restaurants, retailers, professional service businesses and other Florida companies that have liability exposure.
What Is a Business Owner’s Policy?
A Business Owner’s Policy combines several common types of business insurance into a single policy.
Jupiter-Tequesta Insurance’s Business Insurance page explains that a BOP can combine general liability, commercial property and business interruption protection.
This can make a BOP attractive to qualifying small businesses that need more than liability protection alone.
Instead of protecting only against certain third-party liability claims, the BOP can also provide coverage for the business’s own property and certain interruptions to its operations, depending on the policy.
BOP vs. General Liability: A Simple Example
Consider a small retail business.
If a customer is injured in the store, general liability coverage may come into play.
But what happens if a covered event damages the store’s inventory or equipment?
General liability isn’t designed to insure the business’s own property against those losses. That’s where commercial property coverage becomes important.
And if a covered loss temporarily closes the business, business interruption coverage may help with lost income, subject to the policy.
A BOP can package these protections together.
Does Every Business Qualify for a BOP?
No. Eligibility can depend on factors such as the type of business, size, revenue, location and risk profile.
A lower-risk professional office may have different options than a contractor, marine operation or business with substantial equipment and vehicle exposure.
Even when a BOP is available, it may not provide every coverage a company needs.
What Isn’t Automatically Covered by a BOP?
This is where business owners need to be careful.
Buying a BOP doesn’t necessarily mean your company is protected against every possible business risk.
Depending on your operation, you may need additional coverage such as:
- Workers’ compensation
- Commercial auto
- Professional liability or E&O
- Umbrella insurance
- Flood insurance
- Specialized industry coverage
- Commercial marine insurance
For example, a business with several company trucks would need to consider its vehicle exposure separately. A marine business may require specialized commercial marine coverage. A professional firm may have E&O exposure.
What About Hurricanes and Flooding?
Florida businesses also need to pay close attention to storm-related risks.
The exact coverage varies by policy. In particular, flood coverage should not simply be assumed to be included with commercial property insurance. Jupiter-Tequesta Insurance specifically advises Florida businesses to consider separate flood protection where appropriate.
Reviewing deductibles, exclusions and limits is especially important for businesses located in coastal areas of Palm Beach and Martin Counties.
Which Is Right for Your Business?
If your primary concern is liability, a general liability policy may address an important part of your risk.
If your business also needs property and business interruption protection and qualifies for a BOP, a Business Owner’s Policy may provide a convenient way to package several coverages together.
But the decision shouldn’t be based on the policy name alone.
Jupiter-Tequesta Insurance works with Florida businesses to identify their exposures and compare commercial insurance options from multiple carriers. As a local independent agency in Jupiter, the team serves small businesses throughout Jupiter, Tequesta, Palm Beach Gardens, North Palm Beach, Stuart and surrounding communities.
Call Jupiter-Tequesta Insurance at 561-951-7441 to discuss the right insurance options for your business.