GL, BOP & PL:
Explained
Not sure where to start? How do you know what type of small business insurance is a good idea for you? Let’s review the top three most common forms of small business insurance and why you may need them:
General Liability Insurance
- What is it? General Liability (GL) is a requirement for small businesses or single professionals that see clients in person or visit their property. It is sometimes considered the most basic level of business insurance and is quite common.
- Why do you need it? General liability insurance protects you and your business against another person or business’ claims of bodily injury or property damage. GL can help pay for medical expenses and attorney fees that you are legally responsible for.
- For example: A customer comes by your office and trips injuring themselves. If that customer decides to sue you, your GL coverage will step in to pay for the damages. Your GL coverage does NOT pay for injury to yourself or your employee’s. Liability always pays for “the other guy.”
Business Owners Policy
- What is it? A Business Owners Policy (BOP) is more versatile, and protects both a business owner’s business and property - all in one package (typically combining General Liability and Property Insurance). This type of insurance can reimburse the policyholder for damaged personal property.
- Why do you need it? Most companies mistakenly believe that if they have General Liability Insurance, their own losses are covered along with the losses or accidental harm of their customers. However this is not the case. A GL policy does NOT protect you for your OWN property. This is one of the main reasons why you would need to consider a BOP.
- For example: A BOP would cover many scenarios including if a customer trips on an uneven front step, if an employee accidently harms a customer’s property, if a product accidently harms a client, if a break-in happens at the business owner’s property and equipment is stolen, and the list goes on.
Professional Liability Insurance
- What is it? Professional Liability (PL), also known as Errors and Omissions, a type of liability insurance that covers you for failure to uphold contractual promises in mostly service-based professions.
- Why do you need it? In short, Professional Liability insures the work that you do and the advice that you give. If your work is incomplete, inadequate, or not delivered on time and a client sues you, PL will cover the cost of the lawsuit and any damages that are awarded.
- For example: Professional Liability Insurance is most closely associated with Professional services. Attorneys, accountants, architects, engineers, designers, photographers, financial advisers, real estate agents and other such professions usually need some form of PL insurance.