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 DENT REMOVAL BUSINESS
Example 1: A new employee is trying to sand a repair down to paint it when he loses control of the sander, causing extensive damage to the customer’s vehicle. The general liability insurance policy you carry should cover the cost of repairing the damage.
Example 2: One of your customers is walking into the shop to review the repairs to his car when he trips over an air compressor hose, falling and breaking his wrist. He asks that your business pay for his medical treatment. Your general liability insurance will likely cover this expense.
Example 3: A customer is walking from the parking lot into your shop when she trips over some broken asphalt and breaks her arm. She decides to sue your business. Your general liability insurance will cover the cost of your legal defense. It will also pay for a settlement if necessary.
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 dent removal business in America spends between $450-$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.
OTHER TYPES OF COVERAGE DENT REMOVAL BUSINESSES 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 dent removal businesses should obtain:
Workers’ Compensation Insurance
The state that you do business in most likely requires employers to carry workers’ compensation insurance. If one of your employees is injured performing job-related duties, your workers’ comp policy will pay for their medical treatment. If the employee cannot work due to the injuries, the policy will help pay for lost wages while they recover.
Commercial Property Insurance
You put a lot of money into the equipment and supplies you need to operate your dent removal business. But if you lose your equipment, like if a fire were to break out and destroy it, then you might have a tough time financially replacing all of it. However, if you have a commercial property insurance policy, you can file a claim with your insurer after such a loss. If the loss was caused by a covered event, you should be able to get compensation to help pay for replacement equipment.
TYPES OF COVERAGE SOME DENT REMOVAL BUSINESSES MAY NEED
In addition to the policies outlined above, there are a few other types of coverage your dent removal businesses 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
The general liability insurance you carry is sufficient for protecting your business in most cases, but there are exceptions—like if your company is sued and loses a lawsuit that requires you to pay major damages. If the limits of your general liability insurance are exceeded, you could be left holding the tab. But if you have an umbrella policy, it will kick in where the general liability insurance leaves off so you do not have to pay out of pocket.
Commercial Auto Insurance
A commercial auto insurance policy is necessary for any vehicle that is used for business. With such a policy, your commercial vehicles are covered in the event of an accident. The policy will pay for fixing or replacing vehicles and for medical treatments for the injured. It will also pay your legal costs if you cause an accident and are sued by the other driver.
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.