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 BABYSITTER

Example 1: When a child contracts a devastating disease and ultimately dies, their parent blames you for the child’s illness and sues. Even if you’re not at fault, general liability insurance would cover your legal fees and any damages awarded in a settlement.

Example 2: While watching a child at your house, she slips and falls down the stairs. General liability insurance would cover the child’s medical bills for any resulting injuries.

Example 3: State law may require you to carry general liability insurance, depending on your state and babysitting situation.

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, babysitters in America spend 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 Babysitters 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 babysitters should obtain:

Commercial Umbrella Insurance

While your general liability insurance policy covers most claims, this coverage provides added protection against large claims involving a child’s injury or illness that could exceed the limits of your primary coverage. Commercial umbrella insurance protects you from paying out-of-pocket for any legal fees and awarded damages that exceed your primary policy.

Types Of Coverage Some Babysitters May Need

In addition to the policies outlined above, there are a few other types of coverage your babysitter 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 use a personal vehicle to drive children around while babysitting them, you may need commercial auto insurance because many personal auto policies don’t cover work-related accidents. A commercial auto policy protects you, your car and others on the road in the event of a work-related accident by covering vehicle repair costs as well as medical treatment for anyone injured. 

Home-Based Business Insurance

If you watch children at your home, check with your homeowners' insurance provider to ensure your policy protects you against liability from work-related accidents. If not, consider adding home-based business coverage to your business owner policy (BOP) or your existing home insurance policy.

Workers’ Compensation Insurance

Most states require businesses to carry workers’ compensation insurance for their part-time and full-time employees, but you may also use it to protect yourself as a business owner from work-related injuries. Because some health insurance policies don’t cover injuries sustained at work, consider purchasing workers’ compensation insurance to protect yourself if you become injured or fall ill while babysitting.

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.