About General Liability Insurance
All businesses, regardless of industry, face risks that should be covered by insurance. The most common and comprehensive type of policy business owners invest in is general liability insurance (or CGL).
Some of the risks CGL insurance covers are:
- Bodily injury
- Property damage
- Medical payments
- Legal defense and judgment
- Personal and advertising injury
While businesses aren't legally required to carry general liability insurance, operating without it is extremely risky. If your business is sued, you could end up facing fees totaling hundreds of thousands of dollars (or more). Having a sufficient CGL policy in place to help compensate for these damages is the only way to prevent this type of event from devastating your business.
Learn more about the risks covered by general liability insurance.
COMMON SITUATIONS THAT GENERAL LIABILITY INSURANCE WOULD COVER FOR A TREE STUMP REMOVAL BUSINESS
Example 1: During a job, a large stump falls on your client’s driveway, cracking it. They are asking for $19,000, claiming the entire driveway must be redone. Your general liability insurance would cover the cost to repair or replace the driveway.
Example 2: While visiting your facility, a customer falls and injures her back. She is suing your company for the cost of her medical expenses and additional damages. General liability insurance would pay for legal representation and awarded damages.
Example 3: Your new landlord requires evidence of liability insurance. A general liability policy would help fulfill this requirement.
Example 4: Your new ad campaign features a photo that is covered under copyright laws. You have been named in a copyright infringement case and are being sued for $110,000. General liability insurance would assist with attorney’s fees and court-awarded damages.
Of course, this is not an exhaustive list of perils a general liability insurance policy will cover, and some conditions may result in a particular peril not being covered. It's always best to talk to your agent in-depth about the specifics of your policy to avoid blind spots in coverage.
Cost Of General Liability Insurance
On average, tree stump removal businesses in America spend between $400 - $1500 per year for $1 million in general liability coverage.
Check out the chart below for a snapshot of average CGL expenditure across a variety of industries:
Several factors will determine the price of your policy. These include your:
- Number of employees
- Per-occurrence limit
- General aggregate limit
You may be able to acquire general liability insurance at a discounted rate by purchasing it as part of a business owner's policy (BOP) rather than as a standalone policy. A BOP is a more comprehensive solution that includes multiple forms of coverage, such as business interruption and property insurance.
How much will the right insurance cost you?
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Other Types Of Coverage Tree Stump Removal Businesses Need
While general liability is the most important type of insurance to have, there are several other forms of coverage you should be aware of. Below are some other types of insurance all tree stump removal businesses should obtain:
Commercial Property Insurance
A commercial property insurance policy is purchased to protect a business’ investments. Should a loss, such as a windstorm, theft, or fire occur, the policy would pay to repair or replace owned real estate, as well as any business-owned assets kept onsite.
Inland Marine Insurance
Most commercial property insurance policies exclude or limit coverage to business tools used offsite. To avoid any coverage gaps, it may be necessary to purchase an inland marine policy. Inland marine insurance covers business property, equipment, and tools that are damaged while off premises.
Commercial Auto Insurance
If you or a team member is involved in an auto accident conducting business-related activities, commercial auto insurance can pay for the repairs to damaged vehicles, as well as medical expenses, liability claims, and lost equipment.
Types Of Coverage Some Tree Stump Removal Businesses May Need
In addition to the policies outlined above, there are a few other types of coverage your tree stump removal business may require depending on certain aspects of your operations. Some of these might not apply to you, so be sure to ask your agent which policies are right for your business.
Workers’ Compensation Insurance
This state-mandated policy is a requirement for all business owners with employees. It offers medical coverage and a percentage of lost wages for workers who are injured while on the job. If sued over the claim, the policy would also cover your legal representation costs.
Commercial Umbrella Liability Insurance
If a lawsuit is brought against your company that becomes expensive and lengthy, your underlying general liability limits could be exhausted. An umbrella policy takes over where the general liability insurance leaves off, keeping your personal and professional assets protected in a worst case scenario.
Employee dishonesty, fraud, and forgery are excluded coverages on a standard policy. Crime insurance covers you for such a loss, reducing the chances of a gap in coverage.
Additional Steps To Protect Your Business
Although it’s easy (and essential) to invest in business insurance, it should not be your frontline defense. Yes, insurance will compensate for your business’ financial losses after an incident occurs, but it’s much better to avoid losses altogether.
With this in mind, here are three things you can do to better protect your business:
- Use legally robust contracts and other business documents. (We offer free templates for some of the most common legal forms.)
- Set up a limited liability company (LLC) or corporation to protect your personal assets. (Visit our step-by-step guides to learn how to form an LLC or corporation in your state.)
- Stay up to date with business licensing.
- Streamline your business’ internal processes. This will remove unnecessary variables from common tasks and create a safe, consistent environment for conducting business.
Frequently Asked Questions
What is included in a business owner’s policy?
A typical business owner's policy includes general liability, business interruption, and property insurance. However, BOPs are often customizable, so your agent may recommend adding professional liability, commercial auto, or other types of coverage to your package depending on your company's needs.
What is the difference between business insurance and general liability insurance?
"Business insurance" is a generic term used to describe many different types of coverage a business may need. General liability insurance, on the other hand, is a specific type of coverage that business owners need to protect their assets.
Do I need insurance before I start a business?
You should invest in coverage for your business before your first interaction with a customer. Although the cost of insurance may seem high for a brand new business, it's best to be proactive when it comes to protecting your assets. After all, you can't buy insurance to cover a loss that has already occurred.
Will insurance protect my business from everything?
Not necessarily. Certain exceptions may be written directly into your policy, and some perils may be entirely uninsurable. Be sure to discuss the scope of your policy in-depth with your agent to avoid being blindsided by holes in your coverage.