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.
Learn more about the risks covered by general liability insurance.
COMMON SITUATIONS THAT GENERAL LIABILITY INSURANCE WOULD COVER FOR A CIRCUS
Example 1: A small fire occurs in one of your circus tents, causing spectators to panic. The resulting stampede injures several guests, who sue your circus for damages. General liability insurance would cover your legal fees associated with the lawsuits as well as any awarded damages.
Example 2: When a loose monkey scratches a guest during one of your acts, the guest sues for repayment of their medical bills and for general pain and suffering. General liability insurance would cover your legal fees and any awarded damages.
Example 3: While wandering into an area closed to the public, a ticket holder walks too close to the elephant holding area and an animal knocks their child to the ground. If the ticket holder sues for damages, general liability insurance would pay for your legal fees and any damages awarded by the court.
Example 4: A competitor names you in a lawsuit, citing slander, after you launch a new advertising campaign. General liability insurance would cover your legal fees and any damages awarded by the court (up to the limits of your policy).
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
On average, circuses in America spend between $300 - $800 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 circuses 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 circuses should obtain:
Commercial Property Insurance
The circus can’t operate unless it keeps its property in safe, working order. Commercial property insurance covers the cost of repairing or replacing all business-related property in the event of a fire, burglary, or natural disaster. Because a circus moves its property from place to place, and that property includes animals, circus owners should discuss proper commercial property insurance endorsements to ensure coverage of business property during travel.
You can purchase commercial property insurance as part of a business owners policy (BOP).
Business Interruption Insurance
Your business faces significant revenue loss if you need to shut down temporarily to make repairs after a fire or major storm. Business interruption insurance would cover some of your lost revenue, helping to ensure you don’t go out of business while you complete the necessary repairs.
You can typically purchase this coverage as part of a business owners policy (BOP).
Types of Coverage Some circuses May Need
In addition to the policies outlined above, there are a few other types of coverage your circus 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 circus relies on the patronage of tens of thousands of customers each year, which places business owners at greater risk for liability claims. While your general liability insurance policy covers most claims, some accidents or lawsuits may be so catastrophic that they threaten to exhaust the limits of your primary coverage. Commercial umbrella insurance protects you from paying out-of-pocket for any legal fees and awarded damages that exceed your primary policy.
Workers’ Compensation Insurance
Without the talent and dedication of your employees, the show would not go on. 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. It also would cover your legal fees if an employee sues for damages.
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.