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 BOXING CLUB
Example 1: A friend of one of your students is visiting your boxing club and starts climbing into the ring. He gets entangled while trying to slide through the ropes and falls to the ground and breaks some ribs. Your general liability insurance policy will likely cover the cost of treating his injuries.
Example 2: You are putting on a small boxing demonstration to attract attention to your club. One of the audience members slips and falls in the bathroom and decides to file a lawsuit against your business. Your general liability insurance policy would pay for your legal costs, including the cost of a settlement if you settle out of court.
Example 3: You are proud of your new boxing logo and have been using it in all your new marketing material. However, one of your competitors claims that your logo is too similar to his and sues you. The general liability insurance policy you carry will pay for your legal fees, including any payouts or settlements that are required.
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 boxing clubs 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.
OTHER TYPES OF COVERAGE BOXING CLUBS 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 boxing clubs should obtain:
Commercial Property Insurance
All of the boxing equipment you have in your club, including bags, gloves, training materials, rings, ropes, etc., would be expensive to replace. A commercial property insurance policy would help to cover the costs of replacement were you to lose your commercial property in a covered event like a fire.
Professional Liability Insurance
If one of your customers were to sue you based on the training and advice you gave, it could put your business in a precarious financial position. Professional liability insurance is designed to protect you from such risks. As long as your policy is designed specifically for you as a boxing instructor, it will pay for your legal fees if you are sued in relation to the training you provide.
TYPES OF COVERAGE SOME BOXING CLUBS MAY NEED
In addition to the policies outlined above, there are a few other types of coverage your boxing club 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 Umbrella Insurance
Your general liability policy is good coverage for most situations, but its policy limits can be exceeded in certain situations—like if you lose a big lawsuit. With commercial umbrella insurance, your umbrella policy will kick in when your general liability limits are reached.
Workers’ Compensation Insurance
If you have employees, your state most likely requires you to carry workers’ comp insurance. This insurance will pay for treating work-related injuries for your employees. It will also help to cover lost wages while they are out of work.
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.