General Liability, Professional Liability, and BOP: Which One Is Right for You?

One thing is certain. If you own a business, you need business insurance. Without it, you would face paying out of pocket to defend legal claims or pay judgments against your company. This could be financially devastating for many businesses. The question is, what types of coverage do you need to best protect your business? Do you need general liability, professional liability, or a BOP?

General Liability Insurance

Also known as commercial liability insurance, general liability is designed to help cover liability claims against a business. If a third party sues you, it covers court costs, attorney fees, and any settlement or judgment against you, up to policy limits. We live in a litigious society, and general liability insurance is the cornerstone of business protection. No matter how careful you are, your business could be sued for a number of reasons including:

• Bodily injury, if someone is injured on your business premises, for example in a slip or trip and fall accident
• Property damage you or your employees may cause in the process of completing work
• Advertising or personal injuries, such as libel, slander, or copyright infringement

Professional Liability Insurance

Professionals with expertise in a particular area need professional liability insurance for protection against claims of negligence. Depending on the profession, it may be called malpractice insurance or errors and omissions insurance. This coverage is recommended for doctors, accountants, architects, consultants, engineers, real estate agents and brokers, information technology specialists, financial advisors, and any professionals that contract their services.

It is important to have professional liability insurance because general liability insurance does not cover claims arising from mistakes, misrepresentation, malpractice, or negligence. If your business provides services to customers, consider purchasing this type of insurance to cover potential claims against your company for professional errors, mistakes, or failed service delivery. There are two basic types of professional liability policies:

• Claims made: To be covered, the incident must have occurred and been reported within the
  timeframe of the policy, unless a “tail” is purchased.
• Occurrence: This covers any qualified claim resulting from an incident that occurred during the
  policy period, regardless of when the claim is reported.

Business Owner’s Policy (BOP)

Essentially, a business owner’s policy (BOP) is a general liability insurance policy with additional protection. It can save you money by bundling several different policies into a single package at a reduced rate. Typically, a BOP includes:

• General liability insurance
• Property insurance to cover buildings and contents owned by your company
• Business interruption insurance to cover loss of income resulting from a fire or covered event that disrupts your business operations. It may also cover the additional cost of operating temporarily out of another location.

A BOP may not provide all the protection your business needs. For example, it will not cover professional liability, worker’s compensation, or commercial auto insurance. Our knowledgeable agent can sit down with you to discuss the risks your business is exposed to and the types of business insurance protection you may need.