Skip to main content

GENERAL LIABILITY & PROPERTY (BOP)

Traditional Business Insurance

General Liability and Property Insurance Explained

General Liability Insurance protects businesses from financial losses due to third-party claims of bodily injury, property damage, and personal or advertising injury. It covers medical expenses, legal fees, and settlements if a customer, vendor, or visitor sues the business.

Property Insurance covers a business’s physical assets, including buildings, equipment, inventory, and furniture, against risks like fire, theft, vandalism, and natural disasters. It helps repair or replace damaged property and may include business interruption coverage.

Most businesses carry both policies for complete protection, often bundled into a Business Owner’s Policy (BOP).

General Coverages

Pursuant to your particular policy language, coverage provisions, and exclusions; commercial umbrella policies can include coverage for:

A General Liability Insurance policy protects businesses from claims involving bodily injury, property damage, and personal or advertising injury. Key coverages typically include:

  • Bodily Injury – Covers medical costs and legal expenses if someone is injured on your business premises or as a result of your operations.
  • Property Damage – Covers the repair or replacement of third-party property that your business damages during operations.
  • Personal and Advertising Injury – Protects against claims of defamation, libel, slander, or false advertising.
  • Medical Payments – Pays for minor medical expenses incurred by individuals injured on your business premises, regardless of fault, to prevent lawsuits.
  • Legal Defense Costs – Covers the cost of defending your business against lawsuits related to covered incidents, even if the claims are baseless or unfounded.

A Property Insurance policy protects a business’s physical assets from damage, theft, or loss. Key coverages typically include:

  • Building Coverage – Protects the physical structure of your business premises, whether owned or rented, from risks such as fire, storm, vandalism, and theft.
  • Business Personal Property (BPP) – Covers equipment, furniture, inventory, and other property used for business operations.
  • Business Interruption – Covers lost income and additional operating expenses if your business is temporarily unable to operate due to a covered loss (e.g., fire or natural disaster).
  • Tenant Improvements and Betterments – If you are leasing space and make improvements (e.g., custom installations), this covers those changes in case of damage or destruction.
  • Equipment Breakdown – Covers repair or replacement of essential machinery and equipment, such as HVAC systems or refrigeration units, if they malfunction due to mechanical failure.

Claims Scenario

Bella’s Boutique, a small clothing store, operates in a rented retail space. The store sells high-end fashion and has a loyal customer base. One evening, a severe thunderstorm causes a tree to fall on the roof, resulting in significant water damage to the store’s inventory and fixtures. The damage includes water-soaked inventory (clothing and accessories) and damage to the store’s interior, including furniture, displays, and flooring. Business is also interrupted as the store must close for repairs and cleaning for two weeks

Bella’s Boutique has a Business Owner’s Policy (BOP) that includes property insurance, business interruption insurance, and general liability insurance.

How General Liability and Property Insurance Helps:

The property insurance under the BOP covers the cost of repairing the roof and replacing or restoring the damaged inventory and store fixtures. Bella’s policy covers the damaged furniture, clothing, and displays, ensuring that she does not bear the full financial burden of replacing everything.

Since the store is forced to close for two weeks, the business interruption coverage under the BOP helps cover lost income during this period. The insurance provides compensation for the revenue the business would have made during that time, allowing Bella to maintain operations without significant financial strain.

While there’s no direct third-party injury in this case, if any customer had been injured during the storm (e.g., if falling debris caused an injury), the general liability insurance would cover medical expenses and legal costs.

Contact CastleWise to discuss General Liability or Property Insurance coverage.