Jaclyn Moriarty

Personal and advertising injury coverage, included in commercial general liability insurance, protects your business against claims typically involving an infringement on a third party's personal or intellectual rights. It can cover libel, slander, and copyright infringement. Coverage provides defense up to your personal and advertising injury coverage limits, in the event of a claim. What Personal and Advertising Injury Coverage Is As part of your general liability insurance, your business is covered for legal fees and settlements or judgments in claims stemming from personal and advertising injury. These are allegations that you caused someone a financial loss by violating his personal or intellectual rights. Examples of personal and advertising injuries include defamation, copyright infringement, and wrongful eviction. One of the big differences between personal and advertising injury, also called Coverage B, and the other general liability coverage parts are its ability to pay claims involving intentional acts. For instance, a shop owner may intend to use an image in her advertisements without knowing she is violating a copyright. This differs from general liability’s Coverage A regarding bodily injury and property damage, which must occur by accident. Personal Injury Coverage Personal injury coverage constitutes protection for insurable offenses that produce harm—other than bodily injury. A personal injury claim might include: False arrest, detention, or imprisonment: Depriving someone of their personal rights to liberty Malicious prosecution: Taking legal action against someone without probable cause Wrongful eviction: Wrongly expelling someone from their premises Invasion of privacy: Wrongly violating someone’s privacy A personal injury might also mean ruining someone’s reputation through libel or slander. These defamation claims can be made from oral comments, statements made to customers, or even social media posts. When a business or its employees make statements indicating another party is a “crook” or “irreputable,” they run the risk of a personal injury claim. Personal Injury Coverage Example Let’s say you own a mixed commercial and residential building. A bakery leases the storefront from you, but they’re late paying rent one month. You expel them from the premises by changing the locks, and you fail to give any notice. Because the bakery is unable to do business while locked out, the owner sues you for their losses and wrongful eviction. The personal injury coverage included in your general liability policy can help cover the claim and your court costs. Advertising Injury Coverage Like personal injury, advertising injury is coverage provided by your general liability insurance. It protects against offenses related to your business’s advertising of its goods or services. Advertising injury claims include: Libel or slander: Making disparaging oral or written statements, or disclosing private facts, whether or not they’re true Copyright infringement: Infringing on someone else’s copyrights, logos, or intellectual property Misappropriation of advertising ideas: Using another business’s advertising, slogans, or ideas as your own without permission Invasion of privacy: Sharing someone’s private or personal information Additionally, the use of another business’s advertising idea or infringing upon another’s copyright in your advertisement. Advertising Injury Example In this example, you own a home cleaning service, and your competitor has a well-known, catchy jingle. To drum up more business, you send out a direct mail ad that includes exact words from your competitor’s ditty and make false claims about them. In a double-whammy, your competitor sues for copyright infringement and libel. The advertising injury coverage provided by your general liability insurance can help cover the claims and your legal expenses, up to the limits of your policy. What Personal and Advertising Injury Doesn’t Cover Personal and advertising injury coverage excludes numerous acts, particularly intentional acts of violation or misappropriation. If you knowingly violate the rights of another person or business, your claim will often be denied. Publishing or sharing false information even though you know it’s false is another instance of intentional harm. Here’s a list of common personal and advertising injury coverage exclusions: Knowing violation of another’s rights: Intentionally violating another’s rights; knowing your actions would inflict personal or advertising injury Material published with knowledge of falsity: Knowingly spreading or printing false information about a person or company Material published prior to policy period: Failing to obtain coverage prior to time of first publication Criminal acts: Committing a crime or otherwise breaking the law Breach of contract: Failing to honor the terms of a contract Quality or performance of goods: Using advertisements that mislead the consumer about the quality of the goods, products, or services you sell Wrong description of prices: Mistakenly printing or advertising incorrect prices for products or services Infringement of copyright, patent, or trade secret: Infringing upon the intellectual property rights of others only if they’re used in a business’s advertisement and specifically listed as copyright, trade dress, or slogan Unauthorized use of another's name or product online: Using a product or another person’s name without permission on the internet, including email and websites, to mislead potential customers Personal and advertising injury coverage can be wide-ranging. However, many policies provide narrow language about what is and isn’t covered. It can be difficult for a business to prove it’s met the requirements to be covered by your business insurance company. Your insurer has the right to investigate and settle any claim, even if you don’t agree with it. Who Personal and Advertising Injury Is Right For Nearly every business in any industry can benefit from personal and advertising injury protection. Many business owners already purchase commercial general liability insurance for financial protection against unexpected and costly third-party claims related to bodily injury or property damage. It comes with the added protection of personal and advertising injury coverage. Businesses aren't usually required to have general liability insurance, but if yours regularly advertises or makes claims to attract potential clients, a general liability policy with personal and advertising injury coverage is a smart investment. However, if your business's main operations are in advertising and media, the personal and advertising coverage included in general liability may not apply to your services in certain cases. Instead, you need errors and omissions insurance. Media Companies are Excluded from Personal and Advertising Injury Coverage Businesses in media, advertising, marketing, public relations, graphic design, certain types of information technology (IT), and entertainment are often excluded from the advertising injury coverage in general liability. These companies present increased exposure to advertising injuries due to the nature of their services. Personal injuries, however, are likely to be covered. Areas where injuries often excluded from coverage for media businesses include: Advertising, broadcasting, publishing, or telecasting Designing or determining the content or website for others An internet search engine, access, or content or service provider Personal injuries claims typically covered for media companies include: False arrest, detention, or imprisonment Malicious prosecution Wrongful eviction, wrongful entry, or invasion of privacy Media and internet companies can get coverage for advertising injuries by obtaining a separate policy. Media liability insurance, a specialized type of professional liability policy, typically includes coverage for numerous professional liability-related offenses, including copyright infringement and libel. Businesses that may benefit from media liability insurance include: Publishers Broadcasters Advertising agencies Bloggers Film producers Graphic designers Social media influencers Content marketing agencies Brand managers Public speakers Public relations firm Talk to your insurance carrier to ensure you have adequate coverage for personal and advertising injury protection. How Much Personal and Advertising Injury Coverage Costs Most business owners can expect to pay $400 to $600 annually for general liability insurance that includes personal and advertising injury coverage. Depending on your industry or business size, your premium may increase. Different insurers have different pricing based on a variety of factors. Factors that impact the cost of personal and advertising injury coverage include: Business size: If you’re a sole proprietor, you may have a limited budget or time to reach out to customers Industry: Media and advertising businesses may face higher costs because they need to acquire an additional policy for sufficient coverage Customer exposure: How you interact—and how often—with your customers may influence your coverage costs Claims history: If your business has experienced a previous advertising or personal injury claim, your premium may increase Personal and advertising injury coverage costs also vary based on your coverage limits as well as the deductible you select. Personal and advertising injury is a separate limit on your general liability policy so that you may request a higher limit for it—typically with a minimal impact on cost. 4 Ways to Reduce Personal and Advertising Injury Claims If your business advertises and communicates with the public—whether on social media, word of mouth, direct mail, or anything in between, you may be susceptible to personal and advertising injury claims. General liability insurance can help provide financial protection, but a sound plan for avoidance begins with prevention. Here are four tips for reducing personal and advertising injury claims: 1. Always Ask for Permission If you’re using something that belongs to someone else in your advertising, in any format, always ask for permission first. This isn’t a case of “it’s better to beg forgiveness than to ask permission.” Not asking permission is like begging for a lawsuit. This applies if you’re using a customer testimonial, photos of a customer or celebrity, or a competitor’s logo. 2. Don’t Speak Poorly About the Competition Another adage: “If you can’t say something nice …,” then bite your tongue. No matter how you feel about a competitor, keep your opinions to yourself. If a competitor catches wind that you’ve faulted their work or made false statements, they could sue your business for libel or slander. Even if the claim is false, you’ll need to pay for your defense, which can be costly. 3. Check the Copyrights of Images and Slogans It’s easy to find a plethora of images and inspirational quotes on the internet today. Before you use it in your advertising, check the copyrights to avoid infringement. Use copyright-free images or royalty-free music or obtain permission from the copyright owner to use their intellectual property. Once the material is in a tangible form, it’s considered copyrighted. 4. Double Check Everything You Advertise for Accuracy Whether you’re printing an ad or sending a marketing email, ensure all the information included is correct. Avoid making false claims about your services or products and be sure all pricing information is accurate. Your customers will hold you to any promises or statements made. Personal and Advertising Injury Frequently Asked Questions (FAQs) Personal and advertising injuries occur more often than you might realize, and it’s important to get all your questions answered to find the right coverage. Here are a few of the most commonly asked questions: Does personal and advertising injury coverage include social media claims? Personal and advertising injury coverage can help protect your business if you post something false, use another person’s likeness or image without permission, or infringe on another’s copyright on social media. However, if your actions are deemed intentionally harmful or your core operations are in social media advertising, your insurer may deny your claim. How can I save on personal and advertising injury coverage? Personal and advertising injury coverage is included with commercial general liability insurance—a policy you may already have. To help reduce the cost of your premium, consider purchasing a business owner’s policy (BOP), which bundles general liability and commercial property insurance into one affordable package. Am I covered if I own a media business? Most media and advertising-related businesses are not covered by standard advertising injury coverage. They are only typically covered for personal injuries, including false arrest, malicious prosecution, and wrongful eviction. To cover claims of libel, slander, copyright infringement, and other advertising injuries, these types of businesses should consider obtaining media liability insurance. Am I covered if I face a claim that took place prior to obtaining coverage? You might be covered if you have a prior acts endorsement to your personal and advertising injury coverage. Most policies are occurrence-based, but claims-made general liability might be available, which means claims are only covered if both the incident and the claim happen when the policy is active. Prior acts coverage protects claims that occurred prior to a policy’s purchase. Bottom Line Personal and advertising injury claims are claims pertaining to damages your business causes to another person as a result of libel, slander, defaming their products or services, violating their right to privacy, and infringing on a copyright. Personal and advertising injury coverage pays for legal fees and court costs related to these claims.

Forty-nine states require most employers to carry workers’ compensation insurance. Texas is the only state that gives employers the choice to offer coverage. Rules vary, so it’s important to research workers’ compensation insurance requirements by state. Some states require workers’ comp for every business and others base the requirement on the number of employees. What Is Workers' Compensation Insurance? Workers’ compensation insurance covers employees who experience a work-related injury or occupational illness during the course of their regular duties. Depending on your state, workers' comp may pay medical expenses, a percentage of injured employees' weekly wages, and sometimes costs for traveling to healthcare providers. Policies also can cover funeral expenses and death benefits. In exchange for workers’ comp benefits, employees essentially give up their right to sue for workplace injuries. However, some states allow employees to file a civil suit in certain situations such as claims of intentional harm or gross negligence. In these cases, many states offer employer’s liability coverage in their workers’ compensation insurance to pay for the employer’s legal defense. Workers’ Compensation Laws by State With the exception of Texas, 49 states require employers to carry workers’ compensation insurance—but each state has its own set of rules. These rules determine not just who has to carry coverage, but also how they can get it and what happens when they don't. For example, most states mandate employers provide workers’ compensation benefits for full-time employees, but some also require coverage for part-time workers, contractors, temps, and seasonal employees. There are also states that only mandate coverage once you reach a certain number of employees, and others that require workers’ compensation for specific industries such as construction. Workers’ comp laws by state may also list exemptions. Certain types of employees, such as limited liability company (LLC) members, board members, and family members, are often exempt from WC coverage. In most states, you can purchase workers’ compensation insurance from a private insurance carrier like other types of business insurance. In a few states, however, you need to buy it exclusively through the state workers’ compensation fund or an assigned risk pool if your business is difficult to insure. Some states also allow employers the option to self-insure. Who Is Required to Provide Workers’ Compensation Insurance? Nearly every state requires employers to carry workers’ compensation insurance to cover the costs associated with a workplace injury or illness. Some states require employers to carry coverage as soon as they hire their first employee. In other states, employers don’t need to purchase workers’ comp until they reach a certain number of employees. On the one extreme, you have states like California, Hawaii, and Illinois that require employers to have workers’ compensation insurance the moment they hire their first employee. Other states, like Mississippi, have a threshold of five regular employees before the law mandates coverage. Generally, states with a threshold require workers’ compensation coverage once businesses have between three to five employees. You may need workers’ comp insurance if your business falls into one or more of several categories: Businesses located in the United States: Most US states require workers’ compensation insurance for any business that employs workers Businesses in high-risk industries: High-risk industries, like construction, need workers’ compensation to help reduce the overall cost of worker injuries; many states require coverage in these industries without exception Businesses acting as subcontractors: Clients may require subcontractors to have workers’ comp to avoid liability for your or your employees’ injuries; some states, like Virginia, requires employers to cover subcontractors in particular situations Businesses that want to reduce risk: Employees are less likely to sue if their workplace injury care costs are paid by their employer with workers’ comp While seldom required by workers’ comp state laws, some business owners get self-employed workers’ compensation insurance even if they don’t have employees. That way, their business is protected if they suffer an injury that keeps them from earning income. Workers’ Compensation Insurance Exemptions Each state has its own requirements when it comes to who must be covered by workers’ compensation insurance. Each state also has its own exemptions. Often, independent contractors, corporate officers, LLC members, business owners and partners, domestic laborers, and sole-proprietors are exempt from workers’ comp regulations. To know if your business needs workers’ compensation insurance, contact your state’s official department of workers’ compensation. The US Department of Labor provides a directory of each state’s workers’ compensation pages. How to Cover Out-of-State Employees Remember, what’s applicable in one state may not apply in another. Workers’ compensation exemptions fall under each state’s own rules and regulations. That’s important to keep in mind if your business has employees based in other states. Workers’ compensation policies are bound to the state or states listed in the policy, but you might be able to add an additional state to your policy. For example, say your business is located in Texas, where workers’ comp insurance is not typically required. But you have a distributed team of employees working in New York, where coverage is mandatory for all employees. You would need to obtain workers’ comp coverage for the New York employees to remain compliant with state law. If you have distributed employees working in a monopolistic state, however, you may need to buy a separate policy since you can’t purchase it on the private market. In some cases, state governments may have reciprocal agreements with other states. For example, Washington state has signed reciprocal agreements with eight other states that designated coverage under the laws of a worker’s home state when working temporarily in another state. State Penalties for Workers’ Comp Noncompliance Failing to comply with state workers’ compensation insurance requirements can mean serious fines or even jail time. Penalties for noncompliance vary by state but are often dependent on the number of employees in the company and the length of time in noncompliance. Your reason for being without required workers’ comp coverage may also play into consideration. Here are some examples of state penalties for workers’ comp noncompliance: California: Noncompliance is considered a criminal offense and can lead to penalties of twice the amount the business would have paid in workers’ compensation premium or $1,500 per employee, whichever is higher Illinois: Noncompliance is usually a misdemeanor unless an employer is shown to have knowingly failed to comply, then the charge is a felony; employers can be fined up to $500 for every day of noncompliance New Jersey: Noncompliance is considered a criminal offense with violators facing up to $10,000 in fines or jail time of up to 18 months New York: Businesses with more than five employees found noncompliant can face up to $50,000 in fines Virginia: Businesses can face up to $250 for each day of noncompliance, up to a maximum penalty of $50,000 As stated, each state handles noncompliance penalties differently, with many levying hefty fines. The penalty amount that a noncompliant business must pay often depends on: Number of employees: It’s not a rule of thumb, but sometimes smaller businesses face lower fines Length of noncompliance: Many states charge businesses who knowingly fail to obtain workers’ comp coverage for each day of noncompliance Reason for noncompliance: If you purposefully misrepresent your business’s number of employees or the type of jobs they perform, you might be charged higher penalties Whatever the reason, noncompliance can cost your business thousands of dollars in penalties—or you could even face jail time. Also, if you fail to provide workers’ compensation benefits, there’s a higher risk an injured employee could file a lawsuit against your business to recoup the cost of medical expenses and lost wages. How to Obtain Workers' Compensation Insurance In most states, business owners can purchase workers’ compensation insurance from private carriers. Some states also offer state-funded workers' comp for businesses that struggle to find coverage from private insurers. Four states are monopolistic, meaning the state fund is the only avenue. Additionally, some accounting and payroll vendors can help you acquire workers’ comp insurance. Here are four ways to obtain workers’ compensation insurance: Private Insurance Carriers Most states, including many with state funds, allow businesses to obtain workers’ compensation coverage from a private insurance company. Buying directly from a private insurer or broker can sometimes be faster and simpler, while also allowing you to consolidate your business insurance shopping experience and manage all your policies in one place. Competitive Workers’ Compensation State Funds A competitive state-run workers’ compensation fund is set up by a state and used to provide employers with workers’ compensation. State funds are an alternative option to private workers’ compensation insurance companies. If your business is in a high-risk industry or you have existing workers’ comp claims, the state fund might be the right choice. Not all states that have funds are state-administered—some are private insurance companies that write workers’ comp coverage for difficult-to-insure businesses. Rates tend to be more affordable from state funds for high-risk industries or businesses that struggle to find coverage with a private insurer. These states have competitive state funds: Arizona: CopperPoint California: State Compensation Insurance Fund Colorado: Pinnacol Assurance Hawaii: Hawaii Employers Mutual Insurance Company Idaho: State Insurance Fund Kentucky: Kentucky Employers' Mutual Insurance Authority Louisiana: Louisiana Workers’ Compensation Corporation Maine: Maine Employers Mutual Insurance Co. Maryland: Chesapeake Employers' Insurance Company Minnesota: State Fund Mutual Insurance Company Missouri: Missouri Employers Mutual Insurance Company Montana: Montana State Fund New Mexico: New Mexico Mutual Casualty Company New York: New York State Insurance Fund Oklahoma: CompSource Mutual Insurance Company Oregon: SAIF Corporation Pennsylvania: State Workmen's Insurance Fund Rhode Island: The Beacon Mutual Insurance Co. Texas: Texas Mutual Insurance Company Utah: Workers’ Compensation Fund of Utah While not all states have a state-administered fund, some, such as Alaska and South Carolina, offer an assigned risk pool for difficult-to-insure businesses. These pools are often administered by the National Council on Compensation Insurance (NCCI). State-run funds may not always provide the most comprehensive workers’ comp for employers, so it’s important to research your options to find the right coverage. Monopolistic Workers’ Comp State Funds Four states—North Dakota, Ohio, Washington, and Wyoming—prohibit businesses from getting coverage from private insurance carriers. These are known as monopolistic workers’ comp states because the state fund is the only option for workers’ compensation insurance. Employers must obtain coverage from the state fund or be approved to self-insure. Remember to pay special attention to the workers’ comp rules and regulations if your business is located in a monopolistic state, such as if your employees work in another state where a monopolistic fund does not exist. Unless your state or the other state has reciprocity laws, you may not have sufficient coverage. Self-Insurance Some states allow approved business owners to self-insure for workers’ compensation. Instead of paying a premium to a private insurer or state fund, an employer pays the cost of each claim out of pocket. To self-insure, many states require businesses to demonstrate they have the appropriate financial stability to back up claims on their own. Business owners may also find they need administrative and claims processing assistance. Workers’ Comp Requirements Frequently Asked Questions (FAQ) Workers’ compensation insurance can be a complicated and confusing topic for business owners because of its wide variety of regulations and requirements. Below are a few commonly asked questions. Do I need workers’ compensation insurance? In most cases, employers are required by law to obtain workers’ compensation to pay for costs when an employee experiences a work-related injury. Workers’ compensation insurance is state regulated, and there are many exceptions, so it’s important to check your state’s rules. Do I need workers’ comp for employees working in a different state? If you have employees living or working in more than one state, you may need additional workers’ comp coverage. Businesses with remote or distributed teams should carefully research each employee’s workers’ compensation insurance requirements by state to ensure you’re legally operating there. Do I need workers’ compensation insurance if I’m a sole proprietor? If you’re self-employed or a sole proprietor with no employees, your workers’ compensation coverage requirements are dependent on the state in which you operate. Some states allow sole proprietors to opt out of coverage, but you likely still have the option to obtain it. Check your state’s requirements to ensure your business complies with all coverage mandates. How do I manage keeping workers’ compensation premiums low? You can help keep your workers’ compensation premium low by maintaining safe business operations to reduce the likelihood of claims. Implement safety training for employees to help prevent injuries. Typically, businesses with fewer claims see lower workers’ compensation premiums. Bottom Line Workers’ compensation insurance requirements vary by state, by industry, and even by the size, structure, and payroll of your business. Businesses that fail to carry workers’ compensation insurance can face severe fines, lawsuits, or even jail time for noncompliance. Review workers’ comp laws by state to learn if coverage is mandated for your business.

General liability insurance and a business owner’s policy (BOP) both cover the costs associated with third-party claims of physical injuries, property damage, and advertising injuries. However, a BOP includes added protection of commercial property insurance for your business’ physical assets. BOPs are a good option for small businesses looking to bundle their insurance for savings. To protect your small business with a customized BOP or general liability, work with . Its small business specialists can help you find the appropriate coverage for your needs. Getting a quote online is fast and easy—the application only takes about 10 minutes to complete. General Liability vs Business Owner’s Policy Comparison When it comes to general liability insurance vs business owner’s policy, business owners need to know that they share key similarities. General liability insurance provides basic liability protection for claims arising from bodily injury, property damage, and reputational harm. General liability policies typically pay the injured party’s medical and repair bills, plus your legal fees if they sue. A business owner’s policy bundles general liability and commercial property insurance into one product. Commercial property insurance reimburses you for insured business property or assets that are lost or damaged by fire, theft, or windstorms. BOPs also generally include business interruption coverage to pay for ongoing expenses and lost income if a covered event causes you to temporarily halt operations. A BOP has the same protection as a standalone general liability policy and more. If you purchase a BOP, you don’t need a separate general liability policy. Here’s a visual representation of coverage provided by both policies: Because BOPs bundle policies, insurance carriers can offer them at a discounted rate—costing less than what you would spend on standalone policies. Both policies also can be customized with endorsements to meet your business’ coverage needs. How General Liability Insurance Works General liability insurance protects your small business from third-party liability claims, including bodily injury, property damage, medical payments, and others, that can arise from your business operations. It may also include claims for advertising injuries, such as copyright infringement, libel, and slander. General liability policies typically cover a business’ legal defense and any settlements or judgments awarded to an injured party. Generally, if a third party (i.e., anyone who doesn’t work for your company) is injured in some way while doing business with you, your general liability insurance provides coverage. General liability insurance does not cover damage to your commercial property or assets, accusations of negligence, damage to customer’s property in your possession, or damage intentionally caused by your business. Obtaining a general liability policy and a certificate of insurance to provide proof you’re covered demonstrates your business is responsible, established, and credible. Customers are more likely to do business with you when they know you have liability insurance for financial protection. How a Business Owner’s Policy Works A business owner’s policy includes the same liability coverage offered in a general liability policy, including protection against liabilities like third-party injury and property damage, reputational harm, and product-related claims. It also includes the bonus of commercial property insurance for coverage of company property and assets owned by and used for your business. Additionally, BOPs offer business interruption coverage for lost income and ongoing expenses when a covered event forces you to pause operations. Typically, insurers only cover these costs for 12 consecutive months, but it can help you pay for lost revenue, employees’ wages, rent, utilities, and relocation expenses. BOPs are designed specifically for small- or medium-sized businesses, depending on the carrier. Your business needs to meet certain eligibility requirements to qualify for a BOP. These are usually based on revenue, industry, and number of employees. Business Owner’s Policy Eligibility A business owner’s policy combines protection for property and liability risks in one package. This bundle is typically sold at a premium that is less than the total cost of the separate policies. Specific coverage included in a BOP varies among carriers, but most policies require businesses to meet certain eligibility criteria to qualify. Business Owner’s Policy Eligibility Criteria Brandon Gehring, Agent, Insurance Werks Services, typically recommends a business go with a BOP when it’s available. “Unfortunately, BOPs are not available for many classes of business. Contractors, for example, are almost exclusively written on a standalone general liability policy. Most ‘Main Street’ brick-and-mortar businesses are eligible for BOPs (e.g., florists, dry cleaners, and offices).” When to Use General Liability Insurance Most business owners need commercial general liability insurance because it covers the risks they face most often. In fact, it's called general liability because it covers the liabilities that businesses have in common. Though it's not legally required, you may find that clients and landlords require it. Your business might need general liability coverage if: Your business has steady foot traffic: Say a customer trips and falls at your business. A general liability policy can help pay for their medical treatment, and, if they decide to sue your business for the accident, it can help pay for your legal defense. You or your employees visit clients: General liability travels with you when you visit clients or worksites away from your primary business location. For example, if you damage a client’s property in their home, general liability has you covered. You want to land more clients: Clients often consider general liability coverage a prerequisite for working with them because they don't want to be held liable for your business’ actions. Your landlord requires you to have it for a lease: Renting or leasing a space for your business? Many landlords require general liability coverage to ensure they aren’t held liable for incidents for which your business is responsible. The amount of general liability coverage business owners need depends on risk exposure and contractual requirements. Generally, the more risk your business or industry has, the more coverage you need. Additional coverage options may be available depending on your insurer. When to Use a Business Owner’s Policy Business owners often purchase a BOP instead of separate general liability and property policies to ensure they have the coverage they need. Even if your business has minimal property, you still want to make sure it’s protected. It also saves money by taking advantage of the discounted bundle of a BOP. A business owner’s policy offers all the protection of a general liability policy, plus commercial property and business interruption coverage. If you qualify, it’s often cheaper to purchase a BOP than to buy each policy separately. For small, low-risk businesses, a BOP is an excellent insurance package delivering more protection at a discounted price. When to Add a Home Business Insurance Endorsement to Your Homeowners Policy If your business operates out of your home, you may not have much need for the packaged protection of a business owner’s policy. However, most basic homeowners insurance excludes coverage for business liability and offers only limited coverage for business property. Talk to your insurance agent about adding a business endorsement to your homeowners insurance. By adding liability or property coverage as an endorsement to your homeowners policy, you ensure you have some protection for your business. A home business endorsement can increase business property coverage limits and address some business liability exposures. Many policies cover damage to business property owned or used by the homeowner for up to $2,500 on premises or $1,500 off premises. General Liability Insurance vs Business Owner’s Policy: Covered Risks When you’re weighing coverage options for your small business, general liability insurance and BOPs have many of the same covered risks. This is because general liability is one of the policies included in a business owner's policy. However, BOPs also include commercial property coverage. General Liability Insurance Covered Risks General liability insurance is a fundamental business policy because it covers risks inherent in most operations, namely harm to third parties like customers and other visitors. This is why most business owners get general liability insurance. Standard general liability coverage has three parts. These are: Bodily injury and property damage: Doctor or repair bills for someone who is injured on your premises or by your product or service and who doesn’t work for your business Advertising injury: Losses due to claims from libel, slander, copyright infringement, and more Immediate medical payments: No-fault coverage for immediate medical bills, such as an ambulance ride or an emergency room visit Business Owner’s Policy Covered Risks Like general liability, BOPs cover accusations that your business caused property damage or physical harm to a third party. However, a business owner’s policy has the added advantage of commercial property insurance to cover your business-owned property—plus business interruption coverage. A business owner’s policy offers the following protection for small businesses: General liability: Third-party claims involving bodily injury, damaged property, and reputational harm. Commercial property: Damage to business-owned property, including buildings and their contents. Business interruption coverage: Pays for lost profits and ongoing expenses if a covered event forces you to temporarily pause business operations. General Liability Insurance vs Business Owner’s Policy: Costs Depending on the size, type, or industry of your small business, as well as coverage limits, the price of general liability insurance or a BOP varies. Insurance carriers have different pricing based on industry, but other factors play a role, too. General Liability Insurance Costs Most small business owners can expect to pay between $400 and $600 per year for general liability insurance. Industry plays a large part in the cost of your premium. For example, retail shops and restaurants have a lot of foot traffic, so they often pay more for general liability. Business consultants, however, often pay less because they face a lower risk of lawsuits over third-party property damage or injury. Business Owner’s Policy Costs A business owner’s policy, depending on your industry and risks, typically runs between $350 and $3,000 annually. While generally more expensive than a standalone general liability policy, you’re receiving extra coverage and protection bundled into a BOP—liability, commercial property, and business interruption. BOPs typically cost less than purchasing standalone commercial insurance policies, if your business qualifies. General Liability Insurance vs Business Owner’s Policy: Eligibility General liability insurance and business owner’s policy cover many risks for small businesses, but every business may not qualify for coverage. Insurers typically reserve BOPs for businesses with low revenue, small locations, and few staff because this minimizes their risk for claims. General Liability Insurance Eligibility General liability insurance is a bread-and-butter policy for small businesses, and most businesses qualify for it. There’s almost no situation or business that won’t qualify for general liability, though high-risk industries may find that not every carrier is open to providing coverage and may face higher premiums. Business Owner’s Policy Eligibility BOPs are a popular choice for business owners seeking affordable coverage, but not everyone qualifies. Each carrier has different rules, but BOPs are typically reserved for small- to mid-sized businesses in low-risk industries. Additionally, businesses generally need to have fewer than 100 employees, less than $1 million in revenue, and small commercial spaces. General Liability Insurance vs Business Owner’s Policy: Industries Industry is an important factor weighed by insurers to determine if your business will qualify for general liability insurance or a business owner’s policy. Your risks are often determined by your business’ industry. General Liability Insurance Industries Numerous industries qualify for general liability insurance because it’s such a commonplace protection. If your business is in a low-risk industry, such as accounting or consulting, your general liability costs might be lower because there’s little foot traffic and reduced risk of property damage. Home-based businesses and businesses with small offices are also considered low risk. If you’re in a high-risk industry, such as cleaning or construction, you’ll see much higher costs because your work often involves high foot traffic and visiting other people’s property, as well as risky day-to-day operations. Business Owner’s Policy Industries Generally, only businesses in low-risk industries will qualify for a BOP. A business owner’s policy has a cap on policy limits, and it’s often only designated for smaller businesses. The limit is the maximum amount that a carrier will pay on a claim. For example, an office-based business, like an accounting firm, is generally considered low risk. However, a construction business is typically considered high risk because of occupational hazards and working with heavy machinery. General Liability Insurance Example Say you own a painting business, and you regularly travel and interact with clients. If you’re at a client’s residence to paint and accidentally break a mirror, they might sue you for damages. With general liability, your policy can help pay to repair or replace the broken mirror and any other property damage. One thing to remember: General liability insurance doesn’t cover any property your business owns. So if your assistant breaks an extendable ladder you need to paint ceilings or high exterior walls, the cost to repair or replace your equipment would only be covered by commercial property insurance, or the property coverage included in a BOP. Business Owner’s Policy Example Say you own a hair salon. A storm knocks a tree into the salon’s roof, effectively putting a stop to all your operations. A BOP includes business interruption coverage to help pay your expenses while the salon is closed for repairs. That means you’ll be able to pay your rent, employee wages, and lost revenue. A BOP can even help pay for relocation costs to help you set up in a temporary space. A business owner’s policy also covers third-party bodily injury or property damage. And, if any items the salon owns are damaged when the roof collapses, commercial property insurance in your BOP can help pay to repair or replace them. Homeowners Policy With Home Business Insurance Endorsement Example Say you own a home-based business selling hand-knit products online. This means you have regular deliveries and pickups from the post office, creating a lot of foot traffic to your home. Because these deliveries and pickups are business-related, your homeowners policy may not cover liability protection in these situations. If a delivery person slips outside your home, your business could be held liable. By adding a home business insurance endorsement to your existing homeowners policy, you can have protection for these types of incidents. When in doubt, call your insurance company to see what home business coverage fits your needs. Endorsements for General Liability & Business Owner’s Policies Depending on your business’ situation, your insurance carrier may offer additional coverage components to add onto your general liability or BOP. Typically, coverage limits for these endorsements are low, but they offer added protection at a discounted price. Here are some endorsements you might be able to add to your policy: Hired and non-owned auto insurance: Covers legal expenses that arise when you or an employee has an accident with a rental, leased, or employee vehicle. Liquor liability insurance: Covers legal fees and medical costs if alcohol is sold to an intoxicated person who causes harm to others or damages property. Cyber liability insurance: Covers costs associated with a data breach or cyberattack. Inland marine insurance: Covers business property, cargo, or tools in transit. Professional liability insurance: Covers legal fees when clients claim a financial loss due to your negligence or mistakes (also called errors and omissions insurance). Spoilage: Covers replacement of spoiled perishable inventory after a storage malfunction or power outage. Employee dishonesty: Covers financial loss due to employee theft and other illegal activities. Both general liability insurance and a business owner’s policy are highly customizable, depending on your needs. Talk to an experienced insurance agent familiar with your industry to ensure you have adequate coverage and to learn about potential discounts. General Liability Insurance vs Business Owner’s Policy Frequently Asked Questions (FAQs) When considering general liability insurance vs business owner’s policy, business owners may be confused because both are popular options that address their most common risks. Because they share similar qualities, business owners often have questions about how they work or if it’s a good fit for their business. Here are some frequently asked questions about general liability vs BOPs. Can I customize a general liability policy or a business owner’s policy? Both general liability and BOPs are customizable with most insurance carriers. Ask an agent about endorsements that may benefit your business, such as cyber liability insurance for data breach protection or inland marine insurance to protect business property in transit. Keep in mind that the coverage limits for these inclusions are typically low. Is general liability or a BOP required by law for my business? You aren’t legally required to carry a general liability or business owner’s policy. However, liability insurance protects against many common risks business owners face, so it makes good financial sense to get a policy. Additionally, you may need liability insurance to apply for a professional license, sign a client contract, or sign a lease. Who is eligible for a business owner’s policy? To qualify for a BOP, a business must be in a low-risk industry (e.g., accounting or consulting), have few employees, occupy a small work space, and have low annual revenue. Requirements vary among insurers, so you should speak with an agent to find out how your business can qualify for a discounted BOP package. Bottom Line For small business owners just starting out, business insurance is a great investment to protect financial assets. General liability and BOPs offer valuable liability coverage for third-party bodily injury, property damage, and advertising injury. BOPs include the added bonus of commercial property insurance and business interruption coverage at a discounted price in one convenient package. Protecting your small business is simple with a tailored general liability policy or BOP from . The insurer has small business specialists who can customize a policy for your unique business.