Risk Management · July 15, 2021

What Does Business Property and Liability Insurance Really Cover?

Companies need to ensure they're properly insured against potential losses. That often means purchasing a business owner policy, which is business property and liability insurance integrated together into a single policy. Understanding what business property insurance and liability insurance will each cover can help you make the best decisions for your insurance needs.

The basics of business property and liability insurance

There are two primary types of coverage a business owner needs: property insurance and liability insurance.

Business property coverage offers protection for your commercial buildings and any portable property that the business owns or uses. Having coverage for your business property protects you in case your buildings, equipment, furniture, inventory or other property is damaged or destroyed because of a covered loss. Whether you own, rent or lease your building or equipment, a business property policy can help to cover losses attached to that property.

Liability insurance offers you protection if someone makes a bodily damage claim, property damage claim or personal injury claim against your business. This kind of insurance policy can help pay for the costs of property damage claims and medical expenses if something is damaged or someone is hurt at your place of business. It can also help cover the administrative costs needed to handle these claims and the potential court costs if the claimant files a lawsuit.

Purchasing these two types of coverage together, often in a package known as a business owner policy, or BOP, means you're covered for the most likely loss events you may experience as a business owner. Having a BOP means you are covered in case of either a physical or liability claim.

More types of coverage

While general business property and liability insurance is a must for nearly all business owners, it's important to make sure you have all the specific types of coverage you need. You may want to purchase policies that include the following coverage, depending on what kind of business you own:

  • Professional liability insurance: Also known as errors and omissions coverage, this policy will help protect you in the event a customer claims you made a mistake that has caused them a financial loss.
  • Business income insurance: If a covered loss, such as fire or theft, forces you to close operations, this policy can help you cover your costs until you are up and running again.
  • Data breach insurance: If your business handles any private or sensitive customer information, there's always a potential risk for a data breach. This kind of coverage can help pay for the costs associated with notifying affected individuals and engaging credit monitoring services for the affected customers.

Do you have the coverage you need?

Protecting your business from potential loss is an important part of your job as a business owner. Having the proper business property and liability insurance will help keep your business on track if the unexpected were to happen. Make sure you have the right kind of property and liability insurance coverage for your business's needs.


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