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 CHIMNEY SWEEP BUSINESS
Example 1: While working at a client’s home, an employee damages a chimney. The client sues because that damage requires them to replace part of their roof. General liability insurance would cover your legal fees and any damages awarded in the lawsuit.
Example 2: You leave your cleaning equipment and ladder out while speaking with a client and the client’s son trips over your gear and breaks his arm. The injury requires an emergency room visit and several follow-up appointments, leading the client to sue for repayment of his son’s medical bills. General liability insurance would cover these medical costs and your legal fees stemming from the lawsuit.
Example 3: Your marketing manager starts an advertising campaign with a new slogan. A competitor claims your new slogan resembles theirs and files a lawsuit. General liability insurance would cover your legal fees and any damages awarded to the claimant.
Example 4: As you consider franchising your business, you realize you need a bank loan to cover associated costs. As part of the loan terms, your bank requires you to carry at least a $1 million in 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.
On average, chimney sweeps in America spend between $500 - $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.
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 chimney sweeps should obtain:
Commercial Property Insurance
If you own the building from which you operate, you’re responsible for all business-related property housed there in the event of a fire, burglary, or natural disaster. Commercial property insurance would cover the cost of repairing or replacing your building, special equipment, and other business materials after an accident so you can recover quickly.
You can typically purchase commercial property insurance as part of a business owners policy (BOP).
Specialty Property Insurance Coverage Endorsement
Many commercial property insurance policies exclude — or limit coverage for — property you take off your business premises. With this endorsement, you can protect your business property while it’s in transit or at your client’s home. This endorsement also includes coverage for business interruptions and employee theft.
In addition to the policies outlined above, there are a few other types of coverage your chimney sweep 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.
Commercial Auto Insurance
This profession requires travel to and from client sites, increasing your exposure to auto liability losses. Any vehicle you use primarily for business requires commercial auto insurance to protect the vehicle, driver, and others on the road in the event of an accident. Be sure to select a policy that covers not only accident-related vehicle repair costs and medical treatment for anyone injured, but also sufficient protection for any special equipment you carry in your vehicles. Also consider purchasing coverage higher than the state-mandated minimum coverage to safeguard your business from the unknown.
You can purchase commercial auto insurance as part of a business owners policy (BOP) or as a standalone policy.
Workers’ Compensation Insurance
Because chimney sweepers work away from the office, they face many risks outside of their control. Most states require businesses to carry workers’ compensation insurance for their part-time and full-time employees. This coverage protects your employees if they become injured at work or fall ill after a work-related accident. It not only covers an employee’s medical bills and lost wages if they need time to recover, but also any disability or death benefits stemming from a work-related accident. Your policy also should cover your legal fees if an employee sues your business for further damages.
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.