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.

Example 1: A customer sets his baby on a fold-out shelf that he assumes is meant for diaper changing. The shelf is actually a panel that opens for access to an air duct below. It flips downward, dropping the infant on the floor and causing a serious head injury. If found liable, your business would probably be covered by general liability insurance for any resulting settlement or court-mandated medical payments.

Example 2:  A mother allows her child to wander while she shops in your store. The child pulls out a shopping cart and begins using it to roll around the store. One of your employees asks him to stop, but the boy rides his cart into a product display, knocking it down onto his head. If found liable for the accident, general liability insurance could probably help cover any medical expenses or settlements.

Example 3: Your business owns both its storefront and the surrounding parking lot, including a large parking garage. Finding it difficult to navigate through your garage, a customer turns the wrong way into a one-way passage and collides head-on with another car. If found liable, your business could probably rely on general liability insurance to assist in coverage for anything a court decided you owed 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 baby store in America spends between $300-$800 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:

Graph showing average price of general liability insurance prices per industry

Several factors will determine the price of your policy. These include your:

  • Location
  • Deductible
  • 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 Baby 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 baby stores should obtain: 

Product Liability Insurance

Infants are among the most vulnerable consumers, and it is highly important that any products intended for their use be deemed completely safe. However, if a mistake is made, or a manufacturing error occurs, a baby toy or consumable could prove harmful, or even lethal, to an infant. Product liability insurance is always worth acquiring for baby store businesses.

While your company may exercise incredible caution and run its inventory through a safety research process, even a responsible baby business owner needs to make sure that their losses are covered in the event that one of their sold products harms an infant.

Commercial Property Insurance

Nearly all businesses would be wise to pick up a commercial property policy. If your storefronts contain valuable merchandise, an investment in this policy can make the difference between going out of business and overcoming a setback. When fires or violent weather impact your business, damaging or destroying costly chunks of your inventory, commercial property insurance covers the value of these losses, plus damages to any owned real estate. It can also cover damages to equipment like motorized pallet carriers and similar indoor vehicles.

Types Of Coverage Some Baby Stores May Need

In addition to the policies outlined above, there are a few other types of coverage your baby 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.

Workers' Compensation Insurance

A business is only as productive as its employees, and if you are bringing hired help on board, this policy is essential. Workers’ compensation insurance is mandatory for businesses with part-time or full-time employees. Workplace accidents are covered by this insurance, including the provision of disability and death benefits. Workers and their families deserve coverage, comfort, and peace of mind. A compensation policy provides exactly that while protecting your business from damages to employees that occur on-site.

Business Interruption Insurance

Working especially well in tandem with commercial property insurance, this policy covers unfortunate businesses that suffer serious losses due to fires, tornadoes, and similar disasters. Business interruption insurance assists in covering estimated profit losses during downtime, and it can sometimes cover costs associated with temporarily relocating your business. An interruption policy can be the difference between crippling financial damages and a challenging setback.


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.