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 WIND CHIME BUSINESS
Example 1: A potential business partner is visiting your warehouse to see how you organize and ship your wind chimes. The visitor rounds a corner and is knocked over by a passing forklift. He decides to sue your company for damages. Your general liability policy will cover the cost of your legal defense, including the cost of a settlement if one is required.
Example 2: A customer has come to purchase multiple wind chimes. The employee carting the boxes of chimes over loses control of his hand cart and it slams into the back of the customer’s vehicle. The general liability policy you carry covers the cost of damages caused by your business to customer property. You can file a claim and get assistance to pay for repairs.
Example 3: A competing wind chime company has contacted you to inform you that they are filing a lawsuit. They claim that you have libeled their company. While you are not sure what they mean or what your risk is, you only need to contact your insurer to get legal help. The general liability policy you have pays for legal fees when you are sued for libel.
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, wind chime 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.
Other Types Of Coverage Wind Chime 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 wind chime businesses should obtain:
Commercial Property Insurance
You pour a significant amount of capital into your inventory. If you were to lose that inventory in an unexpected event like a fire, it would be difficult to replace all of it. With commercial property insurance, you can file a claim with your insurer to get financial assistance to replace property covered by your policy. This will help you get your business back up and running faster.
Product Liability Insurance
While you hope that no one will be injured by your wind chime products, it is still important to protect yourself. A customer may decide that one of your products caused them harm and file a lawsuit. With product liability insurance, you can rely on your insurer to cover your legal fees. If you do have to settle with the customer, your policy will cover the cost of the settlement.
Types Of Coverage Some Wind Chime Businesses May Need
In addition to the policies outlined above, there are a few other types of coverage your wind chime 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
The employees you have at your wind chime company may be injured performing work-related activities. If this happens, you can rely on your workers’ compensation insurance to pay for their medical care and to help cover lost wages. Workers’ comp protects your business and your employees. It also ensures you meet state requirements, as most states require all businesses with employees to carry workers’ compensation insurance.
Commercial Umbrella Insurance
Commercial umbrella insurance serves as a backup in the event that your general liability insurance policy limits are exceeded. While this does not happen often, it can occur if your business loses a major lawsuit. The umbrella policy will start paying when the general liability policy hits its payout limit and will continue to pay until the limits of the umbrella policy are reached.
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.
Steps After Getting Business Insurance
Depending on where you are in your business building process, here are some other actions you may need to take before getting started:
- If you’re just starting, finding the best name for your business is a great first step. Check out TRUiC’s Business Name Generator.
- After finding the perfect name, get a logo with our Logo Generator.
- Every business needs a website. Using a website builder like the GoDaddy Website Builder or Wix makes building a website simple and fast! Check out our review of the Best Website Builder.
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.