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 COMIC BOOK SHOP
Example 1: An employee is covering the evening shift alone. He decides to extract a vintage golden-age Superman comic, worth several thousand dollars, from its protective casing and plastic cover. As he is reading it, a car alarm goes off and startles him, causing him to spill his coffee on the delicate collectible. The value of the comic drops, and it can only be sold for less than half its previous price. General liability insurance could probably compensate your business with an estimate of the comic’s previous worth.
Example 2: During a Magic: The Gathering tournament, your comic book shop hosts nearly two dozen players who occupy a large section of your store. One of the players, who has been drinking alcohol, becomes physically aggressive with his opponent. He strikes his opponent in the face, dislocating his jaw and knocking out a tooth. The injured customer sues your business. General liability insurance could probably help cover court-ordered payments to the injured party or any settlement reached.
Example 3: A car thief hotwires someone else’s vehicle in your parking lot, driving the stolen car erratically across the pavement and into the window of your store. Your front door and window display of board games are smashed, adding up to more than a thousand dollars of damages. These damages would likely be covered in part by 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 comic book shop in America spends between $300-$600 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 COMIC BOOK SHOPS 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 comic book shops should obtain:
Commercial Property Insurance
Comic book shops contain expensive inventory, from rare comics to high-quality modern board games. Commercial property insurance can help your business avoid losing costly merchandise or even shutting down, due to events like fire and violent weather. This policy also applies to owned real estate, making it especially crucial for comic book businesses that own their storefronts. All it takes is one disaster to put a store out of business, and commercial property insurance can be the difference between ruined entrepreneurship and a thriving company.
Employee theft of high-value goods, like expensive vintage comic books worth thousands of dollars, can amount to serious losses for your business. While you may trust your employees, the complex reasons behind significant theft are not always predictable. If you entrust your storefront to an employee, it would be wise to purchase a policy like this one, which will cover losses due to employee dishonesty, property theft, forgeries, and more.
TYPES OF COVERAGE SOME COMIC BOOK SHOPS MAY NEED
In addition to the policies outlined above, there are a few other types of coverage your comic book shop 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.
Workers' Compensation Insurance
You may decide to staff your business with part-time or full-time employees, which will legally require workers’ compensation insurance. With this policy, your valuable workers are covered in the event that they suffer serious accidental injuries in the workplace. Providing disability and death benefits for your employees and their families, this insurance is an essential inclusion for any business owner who elects to hire help.
Business Interruption Insurance
Interruptions to business are often unexpected, leading to a disorganized scramble as company personnel strives to reestablish the business’s footing. This is a long, expensive process during which every passing day represents stagnant profits at best and a tremendous expense at worst.
Business interruption insurance serves to cover estimated losses during a temporary business closure resulting from a fire, tornadoes, or other similar disasters. The policy can sometimes cover temporary relocations during the rebuilding efforts, keeping companies afloat during challenging transitions.
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.