General Liability Insurance and Business Property Insurance are two foundational policies that protect companies from fundamentally different categories of loss. General Liability protects the business from claims brought by others: third-party bodily injury, third-party property damage, and personal injury. Property Insurance protects the business’s own physical assets (buildings, equipment, inventory, furniture, electronics) against damage from fires, storms, theft, vandalism, and other covered perils. 

In growing companies, these exposures often overlap in day-to-day operations. A warehouse fire that destroys inventory is a property loss; a customer slipping on a wet floor in that same warehouse is a general liability claim. A burst pipe that ruins servers is a property loss; a vendor injured during that cleanup is a general liability loss. Most businesses across tech, consumer, eCommerce, manufacturing, fintech, AI, and beyond rely on both coverages to stay operational when accidents happen.

While they protect against different risks, they work together as a foundational risk management layer, especially as companies scale physical assets, hire employees, use third-party spaces, or interact with customers and partners in real-world environments.

Key Takeaways

• General Liability covers harm to others. Third-party physical injury, damage to someone else’s property, and advertising injury.
• Business Property covers your stuff. Buildings, equipment, inventory, electronics, and tenant improvements.
• Property responds to first-party losses; General Liability responds to third-party lawsuits.
• Leases, vendor agreements, and customer contracts commonly require both.
• Most businesses purchase both, often together in a Business Owner’s Policy (BOP).

General Liability vs. Business Property Insurance: Quick Comparison Table

‍What General Liability Insurance Covers

General Liability Insurance protects your business when its actions or its premises cause harm to someone else. These claims often emerge from interactions with customers, vendors, landlords, and the public.

1. Third-Party Bodily Injury

If someone who isn’t an employee is injured on your premises or by your operations, the policy covers medical costs, settlements, and legal defense.

Example: A visitor trips over a cable at a SaaS company’s office and breaks their wrist.

2. Third-Party Property Damage

Covers accidental damage to another party’s belongings caused by your operations or employees.

Example: An employee installing equipment at a client site drops a device and damages a customer’s server.

3. Personal and Advertising Injury

Covers claims such as libel, slander, copyright infringement in advertising, or reputational harm.

Example: A competitor alleges a startup’s marketing materials contain disparaging statements or unauthorized imagery.

4. Product Liability

Covers bodily injury or property damage caused by products a business manufactures, sells, or distributes.

Example: eCommerce sellers face product liability and third-party slip-and-fall risks at warehouses.

What Business Property Insurance Covers

Business Property Insurance protects your company’s physical valuables, from core equipment to inventory to office contents. Coverage applies when natural or accidental events damage or destroy these assets. It’s especially essential for companies with hardware, inventory, leased office improvements, or warehouses.

1. Buildings, Contents, and Tenant Improvements

Covers damage to offices, facilities, furnishings, and any custom improvements. A leased workspace with built-in wiring or build-outs is often the business’s responsibility to insure.

Example: A fire in a startup’s leased suite destroys desks, laptops, and a custom server closet.

2. Equipment and Electronics

Protects technology hardware, manufacturing equipment, specialized devices, and critical systems.

Example: A power surge fries GPU servers used for AI model training. Replacement falls under property coverage.

3. Inventory

For retailers, manufacturers, consumer brands, and eCommerce companies, inventory is often the largest exposure. Property Insurance covers physical loss of stock on hand at insured locations.

Example: A warehouse flood ruins $500,000 of goods awaiting shipment.

4. Equipment Breakdown

Standard policies typically exclude internal mechanical failure, but an equipment breakdown endorsement covers failures of servers, HVAC, refrigeration units, production machinery, and electrical systems.

5. Business Interruption and Extra Expense

Covers lost income and operating expenses when a covered property event forces operations to stop.

Example: A fire at headquarters halts operations for three weeks. Lost revenue and temporary relocation costs are covered.

6. Off-Premises and In-Transit Property

Many policies extend limited coverage to laptops, demo gear, or other property used off-site.

Key Differences Between General Liability Insurance and Business Property Insurance 

Type of Loss

• General Liability: Covers your responsibility for others’ losses.
• Business Property: Covers losses to your assets.

What Triggers a Claim

• General Liability: Requires a third-party claim alleging injury or damage.
• Business Property: Requires physical damage to insured property.

Financial Impact

• General Liability: Claims affect legal exposure and liabilities to others.
• Business Property: Claims affect asset replacement and operations.

How Coverage Is Valued

• General Liability: Helps pay defense and settlement costs.
• Business Property: Uses replacement cost or actual cash value.

What General Liability and Business Property Don’t Cover

What General Liability Does Not Cover

1. Your Own Property Damage: If your inventory or equipment is destroyed, General Liability does not apply. Property Insurance covers these losses.
2. Equipment Breakdown or Internal Failures: Mechanical failures are not General Liability issues. Property and Equipment Breakdown coverage is needed.
3. Business Interruption: General Liability does not reimburse lost revenue when you can’t operate. Business Property and Business Interruption covers downtime.
4. Cyberattacks and Data Breaches: General Liability typically excludes electronic data incidents. Cyber Insurance is required.
5. Damage to Your Work or Product Without Injury: If your product fails but causes no bodily injury or property damage, General Liability excludes purely economic loss. E&O coverage may apply.

What Business Property Doesn’t Cover

1. Third-Party Injuries or Lawsuits: Property does not cover harm to others. Slip-and-fall in the office would be covered by General Liability.
2. Damage to Others’ Property: If you break a client’s equipment, property insurance doesn’t apply. If a client’s property is damaged during onsite work, it would fall under General Liability.
3. Cyber or Data Loss: Property policies typically exclude electronic data loss except minimal sublimits. Cyber Insurance or Tech E&O fills this gap.
4. Employee Injuries: Employee injuries fall under Workers’ Compensation.
5. Product Liability: If your product injures someone, it’s a General Liability matter.

How Business Property and General Liability Complement Each Other

These policies cover opposite sides of everyday operational risks:

• Property protects your buildings, contents, and ability to operate.
• General Liability protects you from lawsuits stemming from injuries, accidents, and advertising disputes.

Many real-world incidents may trigger both. For example:

• A fire destroys your warehouse (Property).
• A vendor on site during the fire is injured (General Liability).

Together, they form the baseline insurance program for almost every modern business. Because of this, many companies package both in a Business Owner’s Policy (BOP) to simplify coverage.

Learn more about different types of business insurance.

How Vouch Helps

Vouch helps ambitious businesses build a comprehensive, coordinated insurance program by offering:

• Personalized recommendations for Property and General Liability limits
• Benchmarking based on industry, footprint, and asset profile
• Advisors who understand your business and your insurance needs
• Review support for leases, vendor agreements, and enterprise requirements

Vouch’s team helps ensure you’re not underinsured on critical assets or exposed to costly liability risks. Start shopping for insurance with Vouch today.

Business Property Insurance protects what your company owns. General Liability Insurance protects your company when others claim harm. They serve different purposes, respond to different events, and together anchor a foundational risk management strategy for companies of every size.

Pairing both ensures your business can recover from property damage, avoid catastrophic liability exposure, and continue operating through unexpected disruptions.

Frequently Asked Questions

Does Business Property Insurance cover damage to someone else’s property?

No. Business Property only covers assets your company owns or is responsible for. Damage to a client’s property, a vendor’s equipment, or a visitor’s belongings is handled by General Liability.

Does General Liability cover damage to my inventory or equipment?

No. General Liability covers harm to others. Damage to your own inventory, electronics, furniture, hardware, or improvements requires Business Property Insurance.

If a fire shuts down my operations, which policy responds?

Business Property Insurance responds to the fire damage itself, and Business Interruption coverage (often bundled within Property) responds to lost income and extra expenses. General Liability would apply only if the fire injured a third party or damaged someone else’s property.

Does General Liability cover theft?

No. Theft of your equipment, inventory, or office contents is a Business Property claim. Theft committed by employees may require Crime coverage.

Is Business Property Insurance required by landlords?

Often yes. Many commercial leases require tenants to carry Business Property coverage, especially for tenant improvements, equipment, and contents, alongside General Liability.

Does Business Property cover laptops used by remote employees?

Some policies cover off-premises equipmentBusinesses with distributed teams may need specific endorsements.

Does General Liability cover product liability?

Yes. If your product injures someone or damages their property, General Liability typically responds. This is separate from Business Property coverage.

Do most businesses need both Business Property and General Liability?

Yes. One protects your physical assets, the other protects you from lawsuits when others are harmed. Together, they form the foundation of a business insurance program.

Is Business Property included in a Business Owner’s Policy (BOP)?

Yes. Many businesses combine Property and General Liability in a BOP, which often includes Business Interruption and optional equipment breakdown coverage.

Vouch Specialty Insurance Services, LLC (CA License #6004944) is a licensed insurance producer in states where it conducts business. A complete list of state licenses is available at vouch.us/legal/licenses. Insurance products are underwritten by various insurance carriers, not by Vouch. This material is for informational purposes only and does not create a binding contract or alter policy terms. Coverage availability, terms, and conditions vary by state and are subject to underwriting review and approval.