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 A BAIT AND TACKLE SHOP
Example 1: A customer walking through the aisles of your store fails to notice the wet floor and slips and falls. The accident causes him to break his arm and fracture his hip, leading to expensive medical bills. He demands that your business cover the costs of his medical care. Your general liability insurance will likely pay for his treatment.
Example 2: In a rush to deliver a large order, one of your employees rounds a corner with a dolly and runs directly into a customer. The customer falls, breaks his wrist, and later files a lawsuit against your business. The cost of your legal defense will be covered by your general liability insurance policy, as will the cost of paying a settlement if it is determined to be in your best interest to do so.
Example 3: You decide to hire a marketing team to create a marketing campaign to make your business more competitive. The marketers are a little too intense in their criticism of one of your competitors, causing the competitor to file a lawsuit claiming libel. The general liability insurance you carry will pay for your legal costs in situations where you are accused of libel and/or slander.
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.
The average bait and tackle shop 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.
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 bait and tackle shops should obtain:
Product Liability Insurance
A product liability insurance policy covers the damages caused by a product that you sell. If a customer decides that your fishing supplies were the cause of his injuries, for instance, and took legal action, your product liability insurance would pay for the cost of your legal fees and any settlement that you wound up paying to settle the case out of court.
Workers’ Compensation Insurance
Your state most likely has laws requiring you to carry workers’ compensation insurance if you have employees. The workers’ comp policy you carry will help you protect your employees. Should one of them be injured performing a work-related task, the policy will pay for their medical treatment and help cover lost wages if they are required to stay home from work.
In addition to the policies outlined above, there are a few other types of coverage your bait and tackle shop 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 your bait and tackle business has one or more company vehicles, you need commercial auto insurance. Commercial auto insurance provides protection should you or an employee be involved in an accident in a company vehicle. It will help pay for the cost of repairing or replacing the company vehicle and any other vehicles damaged. It will also help pay for medical care for you, your employees, and anyone else injured in the accident.
Commercial Umbrella Insurance
A commercial umbrella insurance policy is designed to pick up the slack when a general liability insurance policy reaches its limits. There are certain situations where this can happen, like if your business were to lose a big lawsuit and you were required to pay extensive damages. Once the limits of your general liability insurance are reached, the umbrella policy takes over.
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.
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.