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 WINE TOUR BUSINESS
Example 1: When entering the wine tour bus, one of your customers trips over a snagged piece of carpet at the entrance of the vehicle. General liability insurance would probably cover the costs of the customer’s medical injuries.
Example 2: During a tour, one of your customers becomes seriously ill. They believe it was because you took them to an unsafe winery and begin slandering you on social media. This results in a major loss of income for your company. General liability insurance would likely cover the costs associated with restoring your reputation.
Example 3: The name of your wine tour business is similar to that of another tour company. The competing tour company decides to sue for lost business and copyright infringement. General liability insurance would likely cover the costs to fight or settle the claim, depending on the other company’s argument against you.
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, wine tour businesses in America spend between $500 - $1,200 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 Wine Tour 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 wine tour businesses should obtain:
Commercial Property Insurance
If you own an office or retail space where people can book tours and congregate before the tour, then commercial property insurance will cover your equipment (e.g., computers) and physical structure from natural disasters, fire, and theft.
Commercial Auto Insurance
You’ll need commercial auto insurance to cover any accidents or damage that may occur on the road. Since people will be consuming alcohol, the unpredictability can pose a real danger for the driver and other patrons. Commercial auto insurance is available to cover your enterprise in case of property damage, accidents, or loss of commercial equipment.
Data Breach Insurance
If most of your customers book online, data breach insurance is available in case your business is hacked or breached. From ransomed data to identity theft, data breach insurance can help your wine tour business stay afloat if you’re a victim of a cybercrime.
Business Interruption Insurance
This insurance provides you with a supplemental income (based on past sales) if you are unable to operate your wine tour business. If your tour buses are out of commission for several months because of a major storm, you can still maintain some cash flow.
Liquor Liability Insurance
Even though a wine tour business doesn’t serve alcohol, they may be held responsible if a guest has too much to drink. If this does occur and the business is sued for damages from the client’s actions, liquor liability insurance can help you pay for the costs associated with their actions.
Workers’ Compensation Insurance
Whether full-time or part-time, all employees need workers’ compensation insurance to protect them from sudden accidents or chronic injuries. This insurance is also applicable for any remote employees you may have working for you.
Types Of Coverage Some Wine Tour Businesses May Need
In addition to the policies outlined above, there are a few other types of coverage your wine tour 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
This insurance gives a wine tour business additional compensation if a general liability policy hits its financial limits. A general liability policy may only cover a fraction of the expenses of a serious lawsuit. Umbrella insurance is specifically made for complicated claims that cause expenses to mount over time.
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.