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 AXE-THROWING BUSINESS
Example 1: A client has been drinking and hurls one of your provided axes at his friend during a bachelor party. If found liable for resulting damages, your business would probably be covered by general liability insurance for court-ordered payments or settlements reached.
Example 2: A client is trying to collect all of the axes toward the end of a session to be helpful. He loses his balance and falls, hurting himself and losing a fair amount of blood before an ambulance arrives. If liable, your business would likely be covered by general liability policy for resulting damage payments owed.
Example 3: A client tries to follow instructions but fails and throws an axe improperly, resulting in a serious shoulder injury that must be surgically repaired. If found liable, your business would probably have coverage through a general liability policy. This would help to cover damages owed or any settlement reached with the plaintiff.
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 axe-throwing business in America spends between $400-$1,100 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 AXE-THROWING 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 axe-throwing businesses should obtain:
Commercial Property Insurance
Your axe-throwing business will need plenty of material assets, including axes, range equipment, targets, safety gear, vehicles, and real estate on which to set up a place of business. If your property is compromised by incidents like fire or violent weather, you will be looking at a sizeable financial setback. Commercial property insurance is designed for businesses that need protection for their material resources, including tools, equipment, machinery, and owned real estate.
Professional Liability Insurance
This is a policy for businesses that offer careful advice in a professional capacity to clients. If your guides at the axe-throwing facility are found to have been negligent or unprofessional in a way that leads to injury or other damages, you could suffer a lawsuit from dissatisfied clientele. Professional liability insurance provides coverage for businesses that might be held responsible for perceived errors or various negative outcomes related to the services provided and/or promised.
TYPES OF COVERAGE SOME AXE-THROWING BUSINESSES MAY NEED
In addition to the policies outlined above, there are a few other types of coverage your axe-throwing 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 Auto Insurance
If you would like to take your axe-throwing business to the next level, you can become a mobile service that relocates per the needs of its clientele. If your business is making that leap, or including commercial vehicles for any reason, this policy is a must-have. Commercial auto insurance keeps you and your employed drivers covered for accidents on public roads.
Traffic collisions can happen anytime and anywhere, and it’s legally required for vehicles to be insured in either a personal or professional capacity.
Workers' Compensation Insurance
Unless you are a one-man axe-throwing company, you’ll need a policy to help cover your employees. Part-time and full-time employees require your business to take out a workers’ compensation policy. Keep your employees and their families covered in the event of workplace accidents.
This policy will include disability and similar benefits for employees injured while in the process of fulfilling their professional duties.
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.