If you are a small business owner, you may have researched the various insurance options available to you. And there is no shortage of them. Depending on the type of business you run, you may need multiple policies to adequately protect yourself and your organization.
The two most notable commercial policies are the general liability policy and the business owners policy. While they may be similar in certain aspects, there are some differences as well. Read on for all you need to know about these two critical business insurance policies.
What Is General Liability Insurance?
Simply put, a general liability insurance policy will protect a business owner, regardless of the size of their company, from lawsuits they might incur. This policy will cover any bodily injury or property damage claims that result from negligence on behalf of the company. For example, if a business has a physical location and a customer slips and falls, a general liability policy will pay for any injuries that may occur.
However, a liability policy is not only necessary for businesses with brick-and-mortar locations. Any company that sells a product or service can benefit from liability protection.
Consider a contractor, for example. Suppose a contractor is renovating a client’s bathroom and negligently damages some of their property during the course of their work. General liability will pay for the repairs to the client’s property.
What Does General Liability Cover?
In addition to paying for bodily injury claims and property damage losses, a general liability policy also provides coverage for the following:
Personal and Advertising Injury
This coverage protects your business against lawsuits for things like libel, slander, defamation of character, and copyright infringement.
Medical payments pay for any medical bills or funeral expenses for an injured party. This coverage differs from general liability, in that there is coverage regardless of whether your business was negligent or not.
If you are a business that sells products, this coverage provides liability protection for those products. If a customer gets injured or sick, or their property gets damaged from your product, this coverage would come into play.
Damages to Premises Rented
This coverage pays for any claims or damages that occur to a property you do not own. For example, if you are a retail operation that rents space from a landlord and there is a fire, damages to the building would be paid by this coverage.
What Is a Business Owners Policy?
Similar to a general liability policy, a business owners policy or BOP provides liability protection for a business. While general liability is coverage offered by a BOP, it is not the only one. A business owners policy is a package policy that also includes additional protection for your business, such as coverage for your property and equipment and business interruption insurance.
What Does a Business Owners Policy Cover?
As mentioned previously, a business owners policy is a package policy, which means that it combines different types of coverage into one policy. General liability is just one of these coverages. In addition to providing all the protection that a GL policy does, it also offers commercial property insurance and business interruption.
Commercial property coverage pays for damage to your business’s assets that result from certain events. Some of the properties it will cover are buildings, inventory, equipment, furniture, signs, fences, landscaping, and essential documents. The perils or events that it will cover usually include the following:
Most commercial property policies will not cover you for floods or earthquakes. However, there may be a way to add these coverages by endorsement, so be sure to check with your insurance agent.
If your business suffers a loss and needs to be shut down for a period, business interruption will help pay for your ongoing expenses, as well as any lost income during this time. The expenses covered by business interruption include payroll, rent, mortgage, loan payments, and any extra expenses a business may incur, such as temporarily relocating while repairs are being made.
Almost all businesses, regardless of industry, can benefit from a general liability policy. But not all may require a business owners policy. As a business owner, you want to ensure you have the right coverage you need, so do not leave anything to chance.
Leap | Carpenter | Kemps Insurance Agency Can Help
Contact the experts at Leap Carpenter Kemps Insurance Agency. They have been in business for over seven decades and have licensed experts on hand to guide you on the best coverage for your organization. Call for a free quote today!
Carmen Sanchez is a Commercial Insurance & Risk Advisor who offers her clients the highest level of service.
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Leap | Carpenter | Kemps Insurance Agency provides Commercial Business Insurance, Employee Benefits, Life and Health Insurance, and Personal Insurance to all of California, including Merced, Atwater, Los Banos, Mariposa, Madera, Fresno, Modesto, Turlock, and Stockton.
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