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 WATER TAXI SERVICE BUSINESS
Example 1: During a tour, water sloshes onboard and a guest slips and falls. The customer believes the driver was steering too aggressively and sues for medical injuries. General liability insurance would cover the legal costs to fight or settle the claim.
Example 2: One of the employees spills a cocktail on a guest, damaging their designer clothes and expensive handbag. General liability insurance would cover the costs to replace the customer’s property.
Example 3: The logo you use for your water taxi service is similar to that of another tour company. The tour company sues for lost business and copyright infringement. General liability insurance would cover the costs associated with fighting the lawsuit or settling out of court.
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, water taxi services in America spend between $450 - $1,000 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 Water Taxi Services 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 water taxi services should obtain:
Commercial Property Insurance
You’ll need commercial property insurance if you own an office or official retail space where customers can gather prior to the outing. This insurance covers not only the structure but also the equipment you use. Typically, commercial property insurance protects against natural disasters, criminal activity, and fires.
Workers’ Compensation Insurance
All water taxi workers will need workers’ compensation insurance in case they’re injured on the job. This insurance will cover sudden accidents (e.g., slips and falls onboard) and chronic injuries (e.g., chronic shoulder pain from steering the vessel).
Business Interruption Insurance
Your business is dependent on your ability to operate your vessels. If those vessels are unfit for passage due to a covered event, you can rely on business interruption insurance to supplement your income while the taxis are under repair.
Types Of Coverage Some Water Taxi Services May Need
In addition to the policies outlined above, there are a few other types of coverage your water taxi service 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.
Commercial Umbrella Liability Insurance
You can think of commercial umbrella insurance as an extension of general liability insurance since it can only be used when a general liability policy has reached its limits. Because lawsuits can tie up a business’ time and money for months at a time, this insurance can cover expenses associated with a particularly egregious claim against you.
Liquor Liability Insurance
If you serve liquor onboard, this insurance protects your business from expenses associated with an inebriated guest. For example, if a guest becomes too intoxicated to walk and they stumble into another guest, you may be held liable for any injuries that result from the fall. This insurance can help pay for any damages that result.
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) to protect your personal assets. (Refer to our guide for step-by-step instructions on how to form an LLC in your state.)
- 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.