General liability answers one question: what happens when someone says your business injured them or damaged their property. It pays defense costs and damages you are legally responsible for, and it is not designed to pay for your own things. A BOP takes liability coverage that is usually very similar to the standard general liability form and bundles it with property insurance for your building or business contents, plus business income coverage. The catch is eligibility. Insurers sell BOPs only to certain types and sizes of business, so some owners carry a separate general liability policy and a separate property policy instead. Neither one is typically meant to cover injuries to your employees, your vehicles or professional mistakes.
What each policy is
Commercial general liability, or CGL, is the standard liability policy for businesses. ISO’s occurrence version is form CG 00 01. It responds to bodily injury and property damage arising from your premises, operations, products and completed work, and to personal and advertising injury such as libel, slander and false advertising. Along with paying damages the business is legally obligated to pay, the insurer promises to defend suits seeking damages the policy could cover. It is not designed to pay for property the business owns, rents or occupies, apart from narrow exceptions such as fire damage to premises it rents.
A businessowners policy is a package built for eligible small businesses. ISO’s version, BP 00 03, is a single long form holding both the property and the liability provisions. Most of its liability section is identical to the ISO CGL form, so the scope for premises, operations, products and advertising injury is much the same. The difference is that your own property comes along in the same policy. More on general liability and the businessowners policy.
Side by side
- What it insures: General liability: claims by others for bodily injury, property damage and personal and advertising injury, plus defense. BOP: the same kind of liability coverage plus your building, your business personal property, or both.
- ISO form: General liability: CG 00 01 for the occurrence version. BOP: BP 00 03, one form with property and liability sections.
- Lost income: General liability: none. BOP: ISO’s form includes business income and extra expense as additional coverages, not subject to a limit unless the policy is endorsed to set one.
- Liability limits: General liability: a personal and advertising injury limit separate from the each occurrence limit, with aggregate amounts shown on the declarations. BOP: one liability and medical expense limit, and ISO’s form sets its two aggregates at twice that limit.
- Who can buy it: General liability: the standard liability policy used to insure businesses. BOP: only businesses that fit the program’s type and size rules, which vary by insurer.
- Newly acquired organizations: General liability: ISO’s form covers organizations acquired or formed during the policy period for up to 90 days. BOP: ISO’s liability section gives no automatic coverage.
- Employees, vehicles, professional errors: General liability: excluded. BOP: typically outside the policy too, so each needs its own coverage.
What the BOP adds
The property side insures buildings and the contents the business owns. Under ISO’s rules, an owner that occupies its own building has to insure the building and its business personal property in the same policy. If you lease your space, NAIC says not to rely on the landlord to cover your business property, because the building is typically insured only for the basic structure and common areas.
Business income coverage replaces lost earnings after a covered loss shuts the business down, usually after a waiting period, and extra expense helps with the added cost of operating, for example from a temporary location. BOPs typically include optional coverages that can be switched on at the declarations page, and ISO’s program has about 170 endorsements for tailoring the policy. See what a BOP covers and how business interruption coverage works.
Who can get a BOP
Eligibility generally turns on both the type and the size of the business. ISO and AAIS both have BOP programs, and insurers that file their own programs set their own rules. California’s Department of Insurance describes BOPs as written with strict underwriting guidelines, including maximum allowable square footage for office, retail or apartment risks, and points to small main street businesses such as hardware stores, barbershops and accountants’ offices.
Under ISO’s rules some classes are ineligible regardless of size, including manufacturers, auto repair shops and service stations, auto dealers, parking lots and garages, bars and pubs, places of amusement, and banks. Contractors face their own restrictions. A business outside the rules buys the pieces another way: a CGL and a commercial property policy written separately, or combined in a commercial package policy.
What neither one covers
Both policies leave the same big gaps. Injuries to your own employees belong under workers’ compensation; the CGL excludes statutory workers’ comp benefits and most suits over employee injuries. Liability from autos, aircraft and watercraft owned, operated, rented or loaned to an insured is excluded, apart from a number of exceptions, so vehicles need commercial auto coverage. Errors and omissions, such as failing to give appropriate advice, call for professional liability. NAIC also lists harassment, wrongful termination and similar employment claims as outside standard CGL, and health and disability coverage is bought separately.
What decides which one fits
Start with what you own. A business with no space of its own and little equipment or inventory may have little for a property policy to insure, and standalone general liability is built for the exposure it has. A shop, office or store full of fixtures, equipment and stock, where a fire would also stop the income, is the situation a BOP was built for, provided your class and size qualify.
Then read the lease and any contracts. A landlord or customer may spell out liability limits or wording the policy has to match, and a BOP’s single liability limit and fixed aggregates can look different on paper from what a contract written around a CGL lists. A lease may also put property obligations on you that a liability-only policy can’t meet. I check the actual clause before quoting, and proof goes out on a certificate of insurance.
Common questions
Is a BOP the same as general liability?
No. A BOP contains liability coverage very similar to a standard CGL, but it also insures your property and lost business income. General liability alone covers only claims others make against you.
Does general liability cover my own equipment or building?
No. The CGL excludes property the business owns, rents or occupies, with narrow exceptions such as fire damage to premises you rent. That is the job of commercial property coverage, on its own or inside a BOP.
Can any small business get a BOP?
No. Insurers set eligibility by business type and size, and under ISO’s rules classes such as manufacturers, bars, auto repair shops and banks are ineligible regardless of size.
Does a BOP cover workers’ comp or company vehicles?
Not as a rule. The Insurance Information Institute says BOPs do not cover professional liability, auto, workers’ compensation or health and disability insurance, and NAIC says a BOP typically does not include them, so they are usually bought as separate policies.
My lease asks for general liability. Can a BOP satisfy it?
It can when the BOP’s liability section and limits line up with what the lease spells out. Send me the insurance clause and I’ll compare its limits and wording to the policy before you sign.
Sources
- IRMI: businessowners policy basics
- IRMI white paper: the businessowners policy (BOP) and micro-BOP
- IRMI: a high-level view of the CGL policy (Craig Stanovich, 2010)
- IRMI glossary: commercial general liability policy
- California Department of Insurance: commercial insurance guide
- NAIC: small business insurance
- Insurance Information Institute: what does a business owners policy (BOP) cover?
- Insurance Information Institute: understanding commercial package policies
- U.S. Small Business Administration: get business insurance
General information about businessowners and commercial general liability policies as of October 2026, not legal advice. ISO forms change by edition and many insurers file their own BOP programs, so eligibility varies and the policy you buy controls. Coverage depends on underwriting and the terms, conditions and exclusions of the policy actually issued.