CGL or BOP Insurance — What Is Best for My Small Business?

What is Commercial General Liability Insurance?

Commercial General Liability (CGL) is just one of the policies, along with workers' compensation and commercial auto insurance, that you as a business owner may purchase to minimize the financial impact to your company from various risks.

CGL protects your business from lawsuits involving covered events that occur on your premises or arise from your operations or sale of products. It can also cover claim-related attorney's fees, court costs, and settlements or judgments up to the limit of your policy coverage.

CGL insurance is triggered when someone is injured, or someone's property is damaged, as a result of your company's operations. Covered claims may include accidents that occur at your worksite, damage resulting from your sale of products or your completed work off-premises, and personal or advertising injury arising out of your company's operations.

What is personal and advertising injury?

These types of claims generally assert damage to a person or business's personal or intellectual rights. Personal injury claims include libel and slander, and advertising injury, including the infringement of another's copyright or trademark.

How much liability coverage does CGL insurance provide?

A common liability cover limit is $1 million per occurrence ($2 million aggregate). Higher limits may be available, depending on your insurance company.

What is a Businessowners Policy (BOP)?

A BOP combines protection for common property and liability risks that small business owners face. Small businesses can save time and money by bundling multiple coverages under one insurance policy. It typically includes:

  • General liability insurance
  • Business income insurance
  • Property insurance

What is liability insurance under a BOP?

Similar to a CGL policy, a BOP's liability coverage protects against claims for bodily injury or property damage resulting from your business operations. This coverage can also help cover certain litigation costs in the event  you are sued.

What is business income insurance?

Business income coverage protects your business from certain financial losses when you are forced to suspend business operations due to a covered property loss.

What is property insurance?

Property insurance under a BOP can cover the physical building your business owns, as well as the personal property used by your business.

Business personal property can include furniture, inventory, tools, and equipment located at your business.

How are CGL and BOP similar?

  • They both offer basic liability protection from premises liability, property damage liability, and advertising liability claims

  • They both may offer endorsements to help tailor coverage based on a company's needs

How do CGL and BOP differ

  • Businesses of any size can get a CGL policy; however not all businesses can get a BOP, as it is designed for smaller businesses.

  • CGL provides liability insurance, while a BOP is a package policy that includes more than just liability coverage.

Before deciding which policy is best for your business, be sure to contact a licensed business insurance broker or agent, who can provide more detailed information, help solicit quotes from insurers, and answer any questions you have.

An independent agent can help business owners understand which products can best meet their needs.

The information and descriptions on this site are general in nature. The coverage afforded for a particular loss depends on the specific facts and the terms, exclusions, and limits of the actual policy. Nothing on this site alters the terms or conditions of any policy, as the policy controls coverage. Coverage options, limits, discounts, deductibles, and other features are subject to underwriting criteria, state availability, and effective dates. Coverage provided and underwritten by NJM Insurance Company and its subsidiaries, 301 Sullivan Way, W. Trenton, NJ 08628.

The information contained in this article should not be construed as professional advice, and is not intended to replace official sources. Other resources linked from these pages are maintained by independent providers; therefore, NJM cannot guarantee their accuracy.