Running a business is exciting, but it also comes with risks. Whether you’re a startup, a growing small business, or an established company, protecting your assets is essential. At Spotlight Insurance Agency, we help Denver-area businesses navigate insurance options with confidence. One of the most common questions we hear is: “What’s the difference between general liability insurance and a business owners’ policy (BOP)?”
In this blog, we’ll break down these two popular insurance options, highlight their key differences, and help you decide which is right for your business. Plus, we’ll answer some frequently asked questions and provide helpful resources for further reading.
General liability insurance is a foundational policy for any business. It protects your company from claims involving bodily injuries, property damage, and certain types of lawsuits. If a customer slips and falls in your store, or if your business is accused of damaging someone else’s property, general liability insurance covers legal fees, medical expenses, and settlements up to your policy limit.
Third-party bodily injury: Covers medical costs if someone is hurt on your premises.
Property damage: Pays for repairs if your business damages someone else’s property.
Advertising injury: Protects against claims of slander, libel, or copyright infringement in your marketing.
Legal defense: Covers attorney fees and court costs, even for frivolous lawsuits.
General liability insurance does not protect your own business property or cover employee injuries. For those risks, you’ll need additional policies like commercial property insurance or workers’ compensation.
A business owners’ policy (BOP) is a convenient package designed for small to medium-sized businesses. It bundles general liability insurance with commercial property insurance and, often, business interruption coverage. This means you get broader protection in a single, cost-effective package.
General liability coverage: Same as above, protection against bodily injury, property damage, and advertising claims.
Commercial property insurance: Covers damage to your business property, equipment, and inventory from events like fire, theft, or storms.
Business interruption coverage: Helps replace lost income and pay ongoing expenses if your business is temporarily closed due to a covered event.
Cost savings: BOPs are typically less expensive than purchasing general liability and property insurance separately.
BOPs do not include auto insurance, workers’ compensation, or professional liability. If your business needs these coverages, you’ll need to add them separately.
Feature |
General Liability Insurance |
Business Owners’ Policy (BOP) |
Bodily Injury |
Yes |
Yes |
Property Damage (to others) |
Yes |
Yes |
Advertising Injury |
Yes |
Yes |
Business Property Coverage |
No |
Yes |
Business Interruption Coverage |
No |
Yes (often included) |
Cost |
Standalone |
Bundled, often less expensive |
Eligibility |
All businesses |
Small/medium, low-risk businesses |
Choosing between general liability insurance and a BOP depends on your business needs:
Choose general liability insurance if you only need protection against third-party claims and don’t have significant business property or inventory.
Choose a BOP if you want broader protection that includes your business property and potential lost income, and if your business qualifies for this bundled option.
Most small businesses benefit from a BOP because it offers comprehensive coverage at a lower price than buying each policy separately. However, not all businesses are eligible, larger or higher-risk companies may need to purchase these coverages individually.
Whether you’re just starting out or expanding your operations, we’re here to simplify the insurance process and safeguard your future. [Learn more about our business insurance solutions at Spotlight Insurance Agency.
Learn more about business insurance from the U.S. Small Business Administration (SBA) insurance guide.
For more on general liability and commercial property insurance, visit the National Association of Insurance Commissioners (NAIC) business insurance page.
For state-specific regulations, check the Colorado Division of Insurance.
According to industry data, over 60% of small businesses experience a liability claim within their first decade. With the average cost of a liability claim exceeding $75,000, having the right insurance—whether it’s general liability or a BOP—can mean the difference between recovery and financial hardship.
Understanding the difference between general liability vs. business owners’ policy is crucial for protecting your business. While general liability insurance covers third-party claims, a BOP offers broader protection by including property and business interruption coverage often at a lower cost.
At Spotlight Insurance Agency, we’re committed to helping you make informed decisions and secure the right coverage for your business. Contact us today to learn how we can tailor a policy to fit your needs. We can also assist you over call, just dial 720.923.1500.
This answer is not directly covered in the blog. Many insurers allow you to add endorsements for specific risks, such as data breaches or professional liability, but these are not included in a standard BOP.
This answer is not directly covered in the blog. Costs vary widely depending on your industry, location, and business size, but a BOP is generally more affordable than buying each coverage separately.
This answer is not directly covered in the blog. Many insurers offer BOPs for home-based businesses, but eligibility and coverage limits may differ.
This answer is not directly covered in the blog. If your business grows or your risk profile changes, you may need to upgrade to individual policies with higher limits or additional coverages.