Business Owner’s Policy vs. General Liability Insurance

As a business owner, you use careful planning and smart execution to help your company succeed. Those same skills help protect your business from financial losses that might derail the company. One common method of protection is insurance. Choosing the right insurance coverage might seem too involved or time-consuming, given the many options. For example, a business owner’s policy vs. general liability insurance, which should you choose? While both shield your business from costly claims, choosing insufficient coverage could leave you exposed to significant risk, for example, from a burst pipe or customer injury.

In this article, we provide an overview of a business owner’s insurance vs. general liability insurance. You’ll learn what each insurance type covers, who needs these policies, and how much they typically cost. By the end of the article, you should be able to make an informed decision on what type of policy is right for your particular business.

What Is a Business Owner’s Policy (BOP)?

A business owner’s policy (BOP) combines essential coverage types into one package designed specifically for small to medium-sized businesses. Think of it as combining liability protection, property insurance, and business interruption coverage all in one policy — often at a better price than buying each separately.

At its core, a BOP protects your business in three crucial ways:

1. Liability coverage

Covers claims for bodily injury (not related to medical malpractice), property damage, or personal or advertising injury by third parties such as clients, vendors, or other nonemployee, outside parties. Read more below about what types of liabilities this can cover.

2. Property protection

Safeguards physical assets such as buildings (owned or rented), computer systems, and equipment against damage or loss.

3. Income protection

Helps replace lost income if a covered event forces temporary closure of the business.

For example, imagine you own a tax preparer business and a burst pipe damages your computer equipment, causing you to close for repairs and replace office furniture and some technology. A BOP can help cover the cost of replacing the equipment, protect you if any customers were injured by the leak, and help replace lost income during your closure. This comprehensive protection makes BOPs particularly valuable for business owners who own their office location and their physical assets.

What Is General Liability (GL) Insurance?

General liability (GL) insurance safeguards your company from financial losses due to claims from customers, vendors, and other third parties. Those claims include bodily injury (not related to medical malpractice), property damage, or personal or advertising injury. It’s foundational coverage that protects against some of the most common risks businesses face.

GL insurance covers four main types of incidents:

1. Bodily injury

Examples include a customer slipping on a wet floor at your office and breaking an arm or tripping and falling due to potholes in your parking lot.

2. Property damage

Examples include an employee accidentally breaking a client’s antique vase or spilling coffee on their couch during a home consultation.

3. Reputational injury

Examples include if a competitor claims your public statements damaged their reputation or if you’re accused of making false statements about another business.

4. Advertising injury

Examples include accidentally using a trademarked logo in your ads or making misleading claims about your services.

For instance, if you’re a consultant visiting a client’s office and accidentally spill your water bottle on their expensive laptop, GL insurance would typically cover the replacement costs. Or if a customer trips over some cords and requires medical attention, a GL policy would help cover their medical expenses and protect you if they sue.

What Is the Difference Between a Business Owner’s Policy vs. General Liability Insurance?

The main difference between a BOP and GL is scope. A BOP is a package that includes GL and additional coverages, while GL operates as stand-alone protection against third-party claims. Think of GL as one important tool (like a hammer for basic repairs) and a BOP as a toolkit.

Here’s how they differ:

• Coverage breadth. GL covers only third-party claims, while a BOP includes GL coverage plus protection for your business property and income (often referred to as “first party coverage”).
• Property protection. GL won’t help if a fire destroys your inventory or equipment — but a BOP will.
• Business interruption. If a covered event forces you to close temporarily, GL offers no protection for lost income, while a BOP helps replace that lost revenue — for instance, if a fire forces your restaurant to close for two months, it could help cover lost revenue from missed dinner service.
• Customization. Both policies can be tailored with additional coverage, but BOPs start with more protection.

BOP vs. GL: What Both Policies Don’t Cover

Whether you buy a BOP or GL insurance, you will likely need extra insurance coverages to help protect against life’s other issues. Here are some other issues you may want to protect against and the policies that will help you:

• Auto accidents. If you or your employees drive a company vehicle, look into a commercial auto policy.
• Cyber attacks. Data leaks from cybercrimes are becoming more and more common, even for small businesses. If you manage sensitive information for your customers, you’ll want to consider cyber insurance (and Berxi can add this to your professional liability policy).
• Employee injuries. Workers’ compensation insurance would cover this.
• Errors and omissions. If you or an employee makes a mistake that causes damage (or fines) to a client, you could be sued for those damages. You’ll want to protect yourself with professional liability insurance (also known as E&O or medical malpractice insurance).
• Natural disasters. Damage to property from things like storms, floods, and earthquakes are often excluded from both policies

What Are the Cost Differences Between a Business Owner’s Policy vs. General Liability Insurance?

Since a BOP provides more comprehensive coverage than GL insurance alone, the costs can differ significantly:

Typical cost of a business owner’s policy

• Base cost: $500–$2,000 per year
• Cost factors:
  • Location and property: value and type of physical assets
  • Business size: revenue and employee count
  • Industry risk: construction companies typically pay more than consulting firms
  • Coverage limits: typically includes $1 million–$2 million per occurrence

Typical cost of general liability insurance

• Stand-alone policy: $100–$500 per year
• Add-on cost: Around $150 (when adding to an existing Berxi professional liability policy)
• Main factors: revenue, industry type, claims history

Protect Yourself With Small Business Insurance From Berxi

As your business grows, having the right insurance coverage becomes crucial. At Berxi, we’re committed to providing the comprehensive coverage your business needs.

We understand insurance costs impact your bottom line. That’s why we offer:

• Direct-to-you coverage that helps save money
• Flexible payment options
• Coverage that grows with your business
• Expert claims support when you need it

Like with any business investment, the key is matching coverage to your specific needs. Plus, buying direct from Berxi can save you up to an average of 15%.

Ready to protect your business? Berxi is rolling out a General Liability product state by state throughout 2025. Learn more today.

 

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The views expressed in this article are those of the author and do not necessarily reflect those of Berxi™ or Berkshire Hathaway Specialty Insurance Company. This article (subject to change without notice) is for informational purposes only, and does not constitute professional advice. Click here to read our full disclaimer