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 A BEEKEEPING BUSINESS
Example 1: A client comes by to inspect the premises and watch some of the beekeeping action. He stays back from the hives but ends up getting stung by a bee anyway. The client discovers that he is severely allergic to bees, requiring serious medical attention. In the event that your business is found liable, general liability insurance would probably help to cover court-mandated damages or a settlement.
Example 2: An independent service is transporting your bees and equipment to another site. One of the transporters doesn’t wear the proper beekeeping gear, and when he accidentally drops a container full of bees, he is swarmed and stung many times. General liability insurance would probably help cover the damages to the transporter or a settlement agreed upon by your business and the transporter’s lawyer.
Example 3: Some children visit your farm on a field trip, but one child is so frightened that she runs away, falls, and injures her arm. If found liable, your business would probably be covered for damages or settlements through general liability insurance.
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 beekeeping business 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.
OTHER TYPES OF COVERAGE BEEKEEPING 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 beekeeping businesses should obtain:
Commercial Property Insurance
A lot of special care and equipment go into professional beekeeping. Your delicate instruments, containers, and bee populations are critical to the ongoing success of your operation. In the event of a fire or violent weather damage, a commercial property policy can help cover any sustained losses. This policy is a must-have for many businesses, and it can keep a company afloat when equipment, inventory, or any owned real estate are damaged.
Business Interruption Insurance
Business interruption insurance is an important policy for beekeepers, who depend on the ongoing productivity of their bee populations to make products for consumers. In the event that a disaster strikes, like a tornado or a fire, it may not be enough to have commercial property coverage. Business interruption policies allow a company to recoup losses suffered during the time spent re-establishing the business and starting up again.
Estimated losses in revenue, training for new workers to use complex machinery, and even temporary relocation costs are all examples of items potentially covered by business interruption insurance.
Product Liability Insurance
Most beekeeping operations profit by acquiring honey and other bee-based materials, which they can turn around and sell. If your products are found responsible for damages of any kind to a customer, it can lead to a serious lawsuit. Keep your business covered in the event of product-caused damages with a product liability policy. You never know exactly how your inventory will be used or abused by consumers, so this is almost always a smart purchase for businesses that depend on the sale of material goods.
TYPES OF COVERAGE SOME BEEKEEPING BUSINESSES MAY NEED
In addition to the policies outlined above, there are a few other types of coverage your beekeeping 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.
Home-Based Business Insurance
If you run your beekeeping business from home, you may find that standard home insurance does not apply to business-related accidents or injuries occurring on your home property. Home-based business insurance is designed for exactly this situation, providing commercial liability coverage to businesses that operate from home. Business owners shouldn’t feel obligated to pay huge costs for renting or purchasing a separate place to conduct their work. This policy can be obtained as part of a business owner’s policy or added to home insurance as a rider extension.
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.