Commercial General Liability policy vs. Business Owner’s Policy

we'll explain commercial liability policies and business owner policies

Commercial General Liability (CGL) policies cover legal fees brought on by a third party, while a Business Owner’s Policy (BOP) covers a variety of different types of insurance together in one place, including all of the coverage of a CGL.

The most important thing you need to know, then, is that BOPs are somewhat of an “all-in-one” alternative to CGLs, but that both are great options for any small business owner. 

Why Choose a Business Owner’s Policy (BOP)?

A Business Owner’s Policy (BOP) provides comprehensive coverage in these three areas:

  • General Liability Insurance (See More Below)
  • Commercial Property Insurance
  • Business Interruption Insurance 

Property insurance is a necessity for all owned or rented business spaces and may be required for purchase or lease approval. Any property (including the building itself and its contents) that is lost, damaged or destroyed unexpectedly to keep your business afloat in an emergency.

As long as the accident or disaster is listed in your policy’s contract, it will be covered. If you want more than what is listed in its contract, you can always purchase an endorsement to cover any additional needs your business may have.

Business interruption insurance is another incredibly useful benefit of a BOP. If for any reason your business experiences an insured issue that causes lost revenue, temporary relocation, or you’re no longer able to afford your day-to-day expenses, you will be compensated.

And, if you anticipate needing more coverage than a BOP provides, you can always add extra expense coverage and/or contingent business interruption insurance. Extra expense coverage extends the list of services available with basic business interruption insurance, covering things such as leasing equipment or temporary workers.

Contingent business interruption insurance provides additional benefits for other incidents that cause an issue for your business’s operations. If, for instance, you rely on a single supplier for the goods you sell and that supplier ceases production, contingent insurance will cover it.

BOP insurance, on top of its all-in-one additional benefits, may also reduce your overall insurance rates.

Why Choose a Commercial General Liability (CGL) Policy? 

BOP offers a lot of great opportunities for small business owners, but are inaccessible to a lot of people. To qualify, you must meet certain business qualifications and be considered “low-risk.”

Comparatively, CGL policies can be purchased by almost anyone. Like BOP, they provide liability coverage for legal issues—but CGLs do not offer the other benefits of a BOP.

You have the option to add additional coverage, however, to both plans. So, if you don’t qualify for BOP but still want some of the same benefits, you can add endorsements to your CGL policy.

Protect Your Business with a Mindful Policy — Call Redwood Agency Group

We’ll take the time to understand your business’s specific insurance needs. Our agents and policies are mindful of you and will work carefully to ensure that you’re satisfied and confident in your coverage. Why wait? Call (512) 994-0894 for a FREE quote.