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 DRIVING SCHOOL

Learn more about the risks covered by general liability insurance.

Example 1: A student trips on an extension cord while walking to your restroom and breaks an arm. His parents demand repayment for his medical treatment. General liability insurance would cover the student’s medical bills.

Example 2: If a competitor sues your school for libel, general liability insurance will cover your legal fees and any awarded damages in a settlement.

Example 3: During a tour of your school, a parent slips, falls and breaks a wrist. She claims her injury is the result of your negligence and files a lawsuit. General liability insurance would cover your legal fees and any awarded damages in a settlement.

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 driving school in America spends between $450 - $1,000 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:

Graph showing average price of general liability insurance prices per industry

Several factors will determine the price of your policy. These include your:

  • Location
  • Deductible
  • 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.

Recommended action box icon

How much will the right insurance cost you?

Find what business insurance will cost for your business right now

Get a Free Quote

Other Types Of Coverage Driving Schools 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 driving schools should obtain:

Commercial Auto Insurance

Every vehicle you drive for business purposes requires commercial auto coverage. If you use personal vehicles for work duties, your personal car insurance won’t pay for damages to your car or medical treatment for anyone injured in a work-related accident. Commercial auto insurance protects all vehicles you use on-the-job in the event of an accident.

Professional Liability Insurance

As a driving instructor, it’s possible that one of your students could be involved in an accident and try to hold you responsible. Professional liability insurance would protect you in this situation by covering your legal fees as well as any damages awarded in a settlement.

Types Of Coverage Some Driving Schools May Need

In addition to the policies outlined above, there are a few other types of coverage your driving school 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. 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

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 benefits stemming from a work-related accident.

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.