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 DOG BREEDER
Example 1: A customer comes to meet a new litter of puppies to find the perfect one to take home. She fails to see a hole a dog dug in the yard and steps in it, breaking her ankle. General liability insurance would likely cover the cost of treating the injuries.
Example 2: One of the visitors to your property makes a sudden movement to pet one of your older dogs, startling the dog and leading to a dog bite injury. The visitor decides to take legal action, holding you liable for his injuries. Your general liability insurance policy would pay for the cost of your legal defense as well as any payout or settlement that is reached with the opposing party.
Example 3: The staircase leading down to your breeding area fails while a group of customers is walking down it. Several of them sustain injuries, including broken bones, and require medical care. The general liability insurance policy you carry would likely cover the cost of paying for the treatment of your customers’ injuries.
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 dog breeder in America spends between $300-$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.
OTHER TYPES OF COVERAGE DOG BREEDERS 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 dog breeders should obtain:
Commercial Property Insurance
Depending on the size of your dog breeding operation, you may have invested a significant amount in your equipment and supplies. Should your business suffer a serious incident, like a fire or a storm, and you were to lose your property, it would be difficult to replace out of pocket. A commercial property insurance policy helps to cover the costs of buying new equipment and supplies so that you can get back to doing business as quickly as possible.
Product Liability Insurance
There is always a risk that one or more of your customers will decide to take legal action against you—such as if a customer takes home a dog and the dog suffers from issues you are unaware of, such as extreme aggression. If the customer sues your business because of the dangerous behavior of the dog you sold, your product liability insurance will pay for your legal costs, including hiring an attorney to protect your interests and paying for a settlement if necessary.
TYPES OF COVERAGE SOME DOG BREEDERS MAY NEED
In addition to the policies outlined above, there are a few other types of coverage that dog breeders 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
If you have a vehicle, or more than one vehicle, that you use primarily for business purposes, you need a commercial auto insurance policy. Your commercial auto policy works much like your personal auto policy, providing protection against liability should you be involved in an accident. Not only will the policy pay for the repair or replacement costs for your vehicle, but it will also pay for treating your injuries or the injuries of others who were hurt in the accident.
Home-Based Business Insurance
If your dog breeding business is based out of your home, there is a chance that your homeowner’s insurance will not protect you in the event of accidents resulting from business activities. It is important to contact your homeowner’s insurance provider to determine what your current policy does cover in regards to your business. You should be able to get a home-based business insurance policy as part of a business owner’s policy or possibly as an extension to your current homeowner’s insurance 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.