Reasons a Business Owner Policy is Different from General Liability
One of the most frequently asked questions from business owners regarding insurance involves the differences between Business Owner Policies and General Liability policies.
You may be wondering why you need one policy over another, or if you even need them at all.
So these are seven reasons a Business Owner Policy is Different from General Liability to look at.
1) A BOP covers more perils than general liability
The cost of a BOP is cheaper than general liability and provides the business owner with more coverage.
General liability only covers certain perils, like fire or theft, while a BOP covers all of them. A BOP also offers more coverage for employees, whereas general liability does not.
For example, if an employee were injured in a car accident on their way to work that was caused by another driver and the employee suffered injuries, then their medical bills would be covered under the policy.
If it had been a day when there was no snow and ice, then it would not have been covered. Furthermore, there are no deductibles for BOPs.
So if the damage totaled $100k and you paid $2k out of pocket already, the other $98k will be taken care of by your company’s BOP
2) A BOP covers more than just third-party
bodily injury and property damage
While general liability insurance protects you against third time bodily injury and property damage, a business owner policy will provide you with more comprehensive coverage.
A business owner policy covers damages to your business premises and equipment, as well as the cost of defending any lawsuits filed against you.
It also covers additional living expenses if your home becomes uninhabitable due to an insured event.
Plus, it provides coverage for the death or disability of an employee while they are performing duties on behalf of your company.
Most importantly, your BOP can cover the cost of defense in case your business needs legal help.
Your insurer will pay up to $1 million in legal costs when you’re found not guilty or your case is settled out of court.
3) A BOP can be tailored to your specific business needs
A BOP can be tailored to your specific business needs. Unlike general liability, the policy provides coverage for your assets and the assets of your employees during the course of business operations.
In addition, it covers you if a third party takes legal action against you as an individual or the owner of a small business.
The following are just some of the many ways in which this type of insurance differs from other types:
✓) Loss of income – If one of your employees gets injured on the job and cannot work for an extended period of time, a BOP would cover lost wages but most likely not medical expenses unless they were incurred at work.
4) A BOP can save you money on insurance premiums
A business owner policy (BOP) differs from general liability in several ways. It covers the different types of risks that most businesses encounter and offers protection against more than just lawsuits.
Since it’s designed to cover the specific needs of your business, you may be able to save money on insurance premiums by switching to a BOP.
A BOP also protects you from things like fines or penalties incurred for workplace safety violations, but unlike general liability policies which only cover third-party claims, it also protects your company if employees are injured on the job.
Plus, it covers some loss of income for employees who are unable to work due to illness or injury something that few other policies offer.
5) A BOP can give you peace of mind
A business owner policy (BOP) can give you peace of mind. Unlike general liability, BOPs are designed to protect your business against claims made by third parties and the damages they cause to your property.
A BOP also protects you and employees against claims filed by third parties for injury or death sustained in your workplace.
For example, if an employee trips over a cable and falls down, breaking their arm, the BOP can help pay for the medical bills that result from this injury.
In some cases you may need both: In some cases you may need both; general liability insurance can provide coverage when a claim arises out of personal injuries caused by alcohol consumption at your company’s holiday party.
A BOP is not enough on its own: It’s important to note that a BOP is not enough on its own. Your general liability insurance may still be needed to cover bodily injury or property damage resulting from premises liability claims like slip and fall incidents on your business premises, broken glass in the store, or an accident related to power tools.
6) A BOP can be used as an asset protection tool
A business owner policy (BOP) is different from general liability. A BOP can be used as an asset protection tool.
Unlike general liability, the business owner policy covers damage to both property and bodily injury that is caused by your business activities.
This includes employee accidents and customer injuries on your premises or while being served by you or one of your employees.
The BOP also protects against losses due to pollution or contamination in connection with the operations of your business.
It also offers coverage for many lawsuits filed against you, such as those alleging defective products, libel, slander and copyright infringement, which are not covered by general liability policies.
A common misconception about BOPs is that they only cover money lost by your company because of operational failures. While this may be true, it should not dissuade you from considering adding a BOP to your insurance portfolio.
Your company’s productivity will suffer if its equipment suffers damages because of fire, storm or accident.
7) A BOP can be used to attract and retain employees
A BOP can be used to attract and retain employees by giving them the peace of mind that if anything were to happen, their business will be taken care of.
If you want to offer your employees this type of coverage, but don’t have the means to pay for it yourself, you may want to explore an option with the help of an insurance broker.
A BOP has higher limits than general liability: Generally, there are no caps on damages in a BOP whereas general liability covers only $1 million worth of damages.
That being said, every individual’s risk tolerance differs so make sure you understand what limits would best suit your needs before purchasing.
For example, if you’re in a risky field such as mining or construction and operate equipment like heavy machinery, it might not be advisable to purchase a policy with too low of limits
alternatively, if you own a flower shop or bakery that doesn’t use any hazardous materials then the lower limits should suffice. Remember