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 CALL CENTER
Example 1: A client is visiting your call center. He is on his way to the restroom when he trips over a box left in the walkway. He breaks his wrist and asks that you pay for his medical treatment. Your general liability insurance will likely cover this expense.
Example 2: One of your competitors has determined that your latest marketing campaign libeled his business. You are fairly certain that you did not commit libel, but you know that you need an attorney to defend your business regardless. Your general liability insurance policy will pay for your legal defense fees.
Example 3: A visitor to your call center is coming in from the parking lot when she slips on some ice and breaks her hip. She sues your business, claiming you should have kept the area free of ice. Your general liability insurance will pay for your legal fees, including the cost of a settlement if one is 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.
On average, call centers in America spend between $400 - $700 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 call centers should obtain:
Worker’s Compensation Insurance
When you have employees, you need workers’ compensation insurance to protect them in the event that they are injured performing job-related duties. Your state likely requires that you carry workers’ comp if you are an employer. As long as you are carrying a policy, your employees can get medical treatment for their work-related injuries and assistance with lost wages while recovering.
Commercial Property Insurance
You have invested a significant amount of capital in the equipment that you use to operate your call center. If you were to lose it in an unexpected event, like a fire, you might find it difficult financially to replace it. With commercial property insurance, you can file a claim and get help from your insurer with replacement costs as long as the loss was caused by a covered event.
In addition to the policies outlined above, there are a few other types of coverage your call center 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
A commercial umbrella insurance policy is designed to protect your business if the limits of your general liability insurance are exceeded. This can happen in certain situations, like if you lose a major lawsuit. When the limits of your general liability insurance are exceeded, the umbrella policy will kick in and pay until its limits are reached.
Professional Liability Insurance
Professional liability insurance protects your business from negligence claims related to mistakes or failure to perform. If one of your clients decides to sue you based on mistakes your business made, your policy will pay for your legal defense fees, including paying settlements if they are required.
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.