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.
COMMON SITUATIONS THAT GENERAL LIABILITY INSURANCE WOULD COVER FOR AN ANTIQUE STORE
Example 1: In your shop, a freelance antique consultant/dealer is working on her laptop as an intermediary, working out a deal between you and a remote customer. An employee accidentally spills his coffee on her laptop, which is worth several thousand dollars. If you were found liable, general liability insurance would probably help cover some of the damages.
Example 2: A customer brings a very valuable vase into your store for an estimate. You accidentally drop it on the floor, and it shatters. If liable, your business would probably be covered for some of the estimated damages or a settlement reached between you and the customer.
Example 3: One of your employees, who manages the antique business’s online presence, jokingly tweets about another local antique shop being “run by crooks.” He retracts the tweet, but it becomes a popular meme featuring an image of the other antique business’ storefront. Your business is sued for slander. General liability insurance would likely cover some of what your business owes in damages or any settlement reached.
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
The average antique store in America spends between $400-$1,500 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.
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OTHER TYPES OF COVERAGE ANTIQUE STORES 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 antique stores should obtain:
Commercial Property Insurance
An antique store business absolutely cannot do without a commercial property policy to cover its inventory. Antiques are often irreplaceable vestiges of the past. Only in a colloquial sense are these objects “priceless” — to your business, they are worth a great deal. In the event of disasters like fire or violent weather, your inventory can be covered under a commercial property policy for any damages incurred.
Many valuable antiques are small enough to be carried off in the blink of an eye. Crime insurance covers instances of employee theft of business or client property, as well as losses resulting from a forgery. So if a customer asks you to estimate the value of his antique collection and it is stolen overnight by an employee, crime insurance can provide coverage. Alternatively, if a valuable signed document is purchased by your business, and it turns out to be a worthless forgery, this too can be covered by a good crime insurance policy. Other coverage includes digital fraud and the theft of actual money on your premises.
TYPES OF COVERAGE SOME ANTIQUE STORES MAY NEED
In addition to the policies outlined above, there are a few other types of coverage your antique store 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.
Home-Based Business Insurance
If you prefer to save on rent and operate out of your own house, this can be a wise choice. Don’t assume that your standard home insurance will act as coverage for issues that arise in the context of your business operation. You may be found liable for damages incurred on the premises of your house during business hours.
This policy can be purchased as part of a business owner’s policy or as an extension (known as a rider) to your existing homeowner’s insurance policy.
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.