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 CRUISE LINE BUSINESS
Example 1: A passenger injures himself when your cruise ship collides with another ship during docking. General liability insurance would cover the cost of the passenger’s medical bills.
Example 2: While the ship’s captain believes there’s enough room to clear a certain bridge, the water level is too high and the bridge hits the wheelhouse as the boat attempts to navigate underneath. General liability insurance would cover the cost to repair damage to the ship and bridge.
Example 3: Guests claim inclement weather ruined their trip and sue your company. General liability insurance would cover your legal costs to fight the lawsuit or settle out of court.
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, cruise lines in America spend between $350 - $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.
How much will the right insurance cost you?
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Other Types of Coverage cruise lines 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 cruise lines should obtain.
Commercial Property Insurance
If you own the buildings in which you operate your corporate headquarters and regional offices, commercial property insurance helps protect your business-related property in the event of a fire, burglary, or natural disaster. It covers the cost of repairing any structural damage to your buildings or grounds as well as repairing or replacing any business materials you store within them.
Workers’ Compensation Insurance
Cruise line workers face a variety of potential on-the-job hazards. 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.
Data Breach Insurance
Cruise lines collect and store a vast amount of customer data from online bookings. If your business loses sensitive client or company information as a result of a cyber attack, this coverage would help pay to restore your computer network, compensate customers for any related losses, and preserve your company’s reputation if you can quickly settle the repercussions of the hack.
Liquor Liability Insurance
Liquor liability insurance protects your company if guests damage your business property due to alcohol consumption. It also covers medical expenses and your legal costs if a customer causes bodily harm to themselves, another passenger, or an employee.
Types of Coverage Some cruise lines May Need
In addition to the policies outlined above, there are a few other types of coverage your cruise line 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 Umbrella Insurance
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. If you need to evacuate guests by helicopter after severe weather damages your ship, for example, this coverage can help pay for that unexpected expense. Commercial umbrella insurance also protects you from paying out-of-pocket for any legal fees and awarded damages that exceed your primary policy.
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.