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 DRONE PHOTOGRAPHY BUSINESS
Example 1: You are taking photographs of a wedding party with your drone when you lose control of it. The drone crashes into the bride, causing her serious injury. She sues your business. Your general liability insurance policy will cover the cost of your legal defense, including the cost of settling out of court if it is necessary to do so.
Example 2: A potential client is visiting your place of business to see your drones when he trips over a power cable and falls. He breaks his wrist and requires medical care. He asks that you pay for his medical treatment. Your general liability insurance policy will likely cover this cost.
Example 3: You have been using a new logo for your business that you feel really represents it well. Unfortunately, another business decides that your logo is too similar to their own and sues your company. The general liability insurance policy you carry will pay for your legal defense in such a situation as well as cover the cost of any 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
On average, drone photography businesses in America spend 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 drone photography 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 drone photography businesses should obtain:
Professional Liability Insurance
A professional liability insurance policy offers protection specific to your business for liability related to negligence claims due to mistakes or failure to perform. There is always the possibility that a client could claim that your work caused him or her injury and sue your business. If this happens, your professional liability policy will pay for your legal fees.
Commercial Property Insurance
You have invested a lot in your drones, photography equipment, and editing equipment. If you were to lose most or all of this property due to an unforeseen disaster like a fire, it would be costly to replace. But if you have a commercial property insurance policy, you can likely get help with replacement costs as long as your loss was caused by a covered event.
Types of Coverage Some drone photography businesses May Need
In addition to the policies outlined above, there are a few other types of coverage your drone photography 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.
Workers’ Compensation Insurance
If you have employees, your state most likely requires you to carry workers’ compensation insurance. A workers’ comp policy provides much-needed protection for your employees if they are injured performing job-related duties. If they are hurt and need medical care, the workers’ comp policy will pay for that treatment. It will also help to pay for the lost wages that they miss out on while recovering from their injuries.
Commercial Auto Insurance
If you have an automobile that you use primarily for business, you need a commercial auto policy to ensure that you meet the legal requirements for auto insurance in your state. Your policy will help to pay for damage to your vehicle and other vehicles if you are in an accident, and it will pay for medical treatment for the injured as well.
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.