General liability coverage protects against lawsuits, but BOP insurance goes further with property damage and business interruption coverage.
Find low-cost general liability insurance for small businesses below.
Updated: August 14, 2025
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The difference between general liability vs. BOP insurance is coverage scope: BOP bundles liability protection with commercial property and business interruption coverage.
Choose general liability for consulting or service businesses with minimal equipment, but upgrade to a business owners policy (BOP) when you have valuable property or inventory.
Consider adding workers' compensation, commercial auto and professional liability to cover specific risks that basic business insurance policies don't address.
When comparing general liability vs. BOP insurance, think of BOP as general liability insurance with added financial protection for your business property and lost income. A BOP bundles these coverage types and costs less than buying separate policies.
The differences become clearer when you see a business owner's policy vs. general liability side by side:
Average Monthly Cost | $104 | $147 |
Bodily Injury (customer injuries on your property) | ✅ | ✅ |
Property Damage (damage to customers' property) | ✅ | ✅ |
Product Liability (problems with products you sell) | ✅ | ✅ |
Commercial Property (your business equipment and inventory) | ❌ | ✅ |
Business Interruption (lost income if you can't operate) | ❌ | ✅ |
Advertising Injury (libel, slander, and advertising issues) | ✅ | ✅ |
Eligibility (who can get this coverage) | Available to most businesses | Small, low-risk businesses only |
How Did We Determine These Rates?
These rates are estimates based on MoneyGeek's analysis of small businesses with two employees across 79 major industries. Actual rates vary significantly based on your specific business location, industry risk factors, claims history, coverage limits and individual insurer underwriting criteria. Contact insurers directly for personalized quotes.
Your business type, property exposure and risk level determine whether you need general liability alone or should upgrade to BOP insurance.
Businesses with significant physical assets benefit most from BOP coverage. Retail stores, restaurants, offices with valuable equipment, and service businesses like salons or repair shops need financial protection for their property, inventory and potential business interruption.
Consulting firms, freelance professionals, and home-based businesses with minimal equipment often start with general liability insurance, then add property coverage as they grow.
Most small business owners buy a commercial general liability insurance policy right after they start their business, and for good reason. People can sue you even if your business didn't do anything wrong. Without business liability insurance coverage, legal fees and settlements could expose you to potentially crippling financial risks.
You need general liability insurance if your business involves:
Customers visit your location | Visitors can slip, fall or get injured by equipment on your premises. | A photography studio client trips over a lighting cord and breaks her collarbone, resulting in a $75,000 lawsuit for medical expenses and lost wages. |
Working at client sites | You can accidentally damage client property or injure third parties while working. | A landscaping crew leaves tools on a client's sidewalk, causing a pedestrian to trip and suffer injuries requiring $35,000 in medical treatment. |
Leasing commercial space | Most commercial leases require proof of general liability coverage before signing. | To secure their downtown office lease, a marketing agency must show $1 million in general liability coverage. |
Professional licensing | Many licensed professions require general liability insurance to maintain credentials. | An electrician must carry general liability coverage to renew his state contractor license and continue working. |
Client contracts | Businesses often require contractors to carry minimum liability coverage before hiring. | A construction company must provide $2 million in coverage to bid on a commercial building project. |
Manufacturing or selling products | Defective products can cause injuries or property damage to customers. | A small furniture maker faces a $150,000 lawsuit when a defective chair collapses and injures a customer's back. |
Running advertising campaigns | Marketing materials can accidentally infringe copyrights or defame competitors. | A cleaning company faces a $25,000 lawsuit after posting social media content that disparages a competitor's work quality. |
A business owner's policy (BOP) combines general liability with commercial property coverage and business interruption insurance, making it ideal for businesses with equipment, inventory or physical locations that could face significant financial losses from property damage or forced closure.
You need a business owner's policy if your business involves:
Significant equipment or inventory | Property damage or theft could shut down your operations and cost thousands to replace. | A photography studio loses $25,000 worth of cameras and lighting equipment when thieves break in, plus faces two weeks of lost bookings worth $8,000. |
Physical business location | Fire, water damage or natural disasters can destroy your workspace and halt business operations. | A small restaurant suffers $40,000 in kitchen damage from a grease fire, requiring six weeks of closure and $15,000 in lost revenue during repairs. |
Revenue dependent on specialized equipment | Damage to key equipment means lost income while you rebuild or replace essential items. | A print shop's main press breaks down, costing $12,000 to repair while losing $3,000 per week in customer orders during the three-week repair period. |
Leasing commercial space | Landlords often require proof of commercial property coverage to protect against tenant-caused damage. | A consulting firm must show commercial property coverage to secure a lease for its office, protecting the landlord's $150,000 renovation investment. |
Storing valuable inventory | Product spoilage, theft, or damage from covered events can create substantial financial losses. | A boutique clothing store loses $30,000 in merchandise when a pipe bursts overnight, flooding the retail space and damaging inventory. |
Client work requiring on-site equipment | You need both liability protection and coverage for tools, equipment, and materials used at job sites. | A landscaping company's truck with $15,000 in equipment is stolen from a job site, while they also face liability when their work damages a client's irrigation system. |
Seasonal revenue concentration | Business interruption coverage helps replace lost income during forced closures during peak periods. | A tax preparation service closes for four weeks after fire damage during tax season, losing $25,000 in anticipated revenue from their busiest period. |
General liability and BOP insurance cover the basics, but they don't protect against every risk your business faces. Many small business owners discover gaps in their coverage only after filing a claim. Smart planning means identifying these gaps early and exploring other coverage types that can fill them.
Required by law in most states if you have employees, this coverage pays medical bills and lost wages when workers get injured on the job. Even if you're a sole proprietor, some states require you to carry it, and client contracts often demand proof of coverage.
Your personal auto policy won't cover business use of vehicles. Whether you own company cars or employees use personal vehicles for work, commercial auto protects against accidents, theft and liability claims that occur during business activities.
When your professional advice, services or expertise causes financial harm to clients, general liability won't help. It's essential for consultants, accountants, lawyers, architects and other service professionals who could face lawsuits over their work quality.
Data breaches affect businesses of all sizes, not just large corporations. This relatively new coverage helps pay for notification costs, credit monitoring, legal fees and regulatory fines when customer data gets compromised or systems get hacked.
Think of this as extra liability protection that provides additional coverage beyond your existing policy limits. For businesses facing potential million-dollar lawsuits, umbrella coverage provides an additional safety net at relatively low cost.
If your business has a board of directors or you're incorporated, D&O protects personal assets of company leaders when they face lawsuits over business decisions. This coverage becomes crucial as businesses grow and face more complex legal challenges.
Wrongful termination, discrimination, and harassment claims can devastate small businesses. EPL covers legal costs and settlements when current or former employees sue over workplace issues that workers' compensation doesn't address.
The right insurance choice depends on what you own and what could go wrong. Consulting firms and freelancers usually need just general liability, but businesses with valuable equipment or inventory get better financial protection when they bundle coverage through BOP. If you have employees, you'll also need workers' compensation, and cyber insurance helps protect against data breaches that affect businesses of all sizes.
Small business owners comparing general liability vs. BOP insurance often have similar concerns about coverage and costs. We've addressed these frequently asked questions below:
Our analysis of small businesses with two employees shows general liability insurance averaging $104 monthly versus $147 monthly for BOP insurance. The $43 difference gets you property coverage and business interruption protection, which often pays for itself after avoiding just one damaging incident.
Growing businesses often wonder when they've outgrown basic coverage. Upgrade to a BOP when you have valuable equipment, inventory or a physical location where property damage could shut you down. The sweet spot is usually when replacing damaged assets would cost more than a few months of upgraded premiums.
Think of BOP as general liability with a property safety net added. BOP insurance includes commercial property coverage for your equipment and inventory, plus business interruption insurance that replaces lost income during closures. General liability only protects against customer lawsuits, not damage to your business assets.
A BOP sounds comprehensive, but it doesn't cover professional liability or cyber risks. You'll need separate policies for service errors and data breaches. These risks need specialized coverage since they involve professional mistakes and digital threats rather than traditional property damage.
Home-based businesses often start lean, and that works in your favor initially. General liability initially covers most home business needs, but consider upgrading to a BOP when storing valuable inventory or using expensive equipment. Think about the upgrade when property damage could seriously disrupt your ability to serve customers.
The claims process shows the real difference between these policies. General liability handles third-party claims when you damage someone else's property or cause injuries, while BOP also covers first-party claims for your own equipment, inventory and lost business income. With BOP, you're also filing claims for your losses, not just defending against others' claims.
About Mark Fitzpatrick
Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. With over five years of experience analyzing the insurance market, he conducts original research and creates tailored content for all types of buyers. His insights have been featured in publications like CNBC, NBC News and Mashable.
Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!
Passionate about economics and insurance, he aims to promote transparency in financial topics and empower others to make confident money decisions.
