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 FISHING CHARTER BUSINESS
Example 1: A potential customer is visiting your place of business to discuss a fishing trip. He fails to see a bunch of cables strung across the ground and trips over them, falling and breaking his arm. Your general liability insurance policy will likely cover the cost of treating his injuries.
Example 2: When stopping by your business to drop off a payment for an upcoming fishing trip, a customer slips and falls on a wet floor and sustains serious injuries. She blames your business and files a lawsuit against your company, demanding compensation. The general liability insurance policy you carry will pay for the cost of your legal defense, including paying for a settlement if it is deemed in the best interests of your business to pay the customer out of court.
Example 3: One of your employees is attempting to teach a visitor how to use a large fishing rod and reel. In his enthusiasm, the employee knocks the customer to the ground, and he sustains injuries. The customer is upset at the employee and takes legal action against your business. Your general liability insurance will pay for your legal costs.
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 fishing charter business in America spends between $400-$1,100 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 FISHING CHARTER 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 fishing charter businesses should obtain:
Professional Liability Insurance
As a charter fishing professional, you face risks unique to your industry. A professional liability insurance policy designed specifically for your business will ensure that you have adequate protection if you are held liable for mistakes or a failure to perform. If a customer claims that you failed in your duties and takes legal action against you, your professional liability insurance policy will cover your legal costs and any settlements you may need to pay.
Commercial Property Insurance
The various supplies and equipment you use to run your fishing charter business probably required a significant investment on your part. Should your commercial property be damaged or lost, such as in the event of a fire or a major storm, then you may struggle to replace all of it out of your own funds. A commercial property insurance policy would give you the financial resources necessary to replace your property so that you could get back to running your business.
TYPES OF COVERAGE SOME FISHING CHARTER BUSINESSES MAY NEED
In addition to the policies outlined above, there are a few other types of coverage your fishing charter 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 that help you operate your fishing charter business, workers’ comp insurance is a necessity. Not only does it help you meet the legal requirements of your state concerning employers, but it also makes sure you have the ability to help your employees get medical treatment for injuries they sustain on the job. An injured employee can get medical care and help with lost wages related to a work injury as long as you have a workers’ comp policy.
Commercial Umbrella Insurance
There are certain situations where the limits of your general liability insurance policy can be exceeded, such as if your business loses a big lawsuit and you are required to pay extensive damages. If all you have is your general liability insurance, then the extra costs beyond your policy limits will have to be paid by you. But with a commercial umbrella insurance policy, you have added protection. The umbrella policy will take over where the general liability insurance leaves off.
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.