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 FLEA MARKET
Example 1: The “Wet Floor” sign in a recently mopped bathroom was knocked over by a visitor, so a woman entering the bathroom was not aware of the slippery floors. She slips and falls sustaining injuries, and she later files a lawsuit against you for damages. The general liability insurance policy you have will pay for your legal fees as well as the cost of a settlement if the case is decided out of court.
Example 2: One of your employees is transporting good across the parking lot when he fails to see the car of a flea market visitor. He barrels into the car with the handcart, causing significant damage. The general liability insurance policy you have covers damages to customer property, so you should be able to pay for repairs without needing to dip into your accounts.
Example 3: The advertising for your flea market appears to have caused losses at a nearby business, so they file a lawsuit against you. The fees for your legal defense will be covered by your general liability insurance policy, up to your policy limits.
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 flea market in America spends between $400-$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 FLEA MARKETS 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 flea markets should obtain:
Commercial Property Insurance
The equipment and supplies you need to keep your flea market running may be damaged by unexpected events such as a fire or storm. The cost of replacing all of your commercial property may be significant. With a commercial property insurance policy, you have coverage that will help to cover these costs. You can get new equipment, supplies, and products with your insurance money so you can start doing business again with minimal downtime.
Workers’ Compensation Insurance
Most states require that employers carry workers’ compensation insurance, although the exact requirements can vary by state. By getting a workers’ comp policy, you can meet your legal obligations as well as ensure that your employees are protected should they become injured due to job-related activities. The policy will pay for medical care to treat such injuries and for lost wages for employees who cannot work due to work-related injuries, up to your policy limits.
TYPES OF COVERAGE SOME FLEA MARKETS MAY NEED
In addition to the policies outlined above, there are a few other types of coverage your flea market 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
An umbrella policy is designed to pay for damages and expenses after the limits of your general liability insurance policy are reached. If you do not have an umbrella policy, you will be forced to find another way to pay—but if you do have an umbrella policy, you can rely on it to cover the costs up to the limits of the policy.
Commercial Auto Insurance
A commercial auto insurance policy is necessary for any vehicle that you use primarily for your business. A truck for transporting goods to the flea market, for instance, should have a commercial auto policy. That way, if you or an employee is involved in an accident with the company truck, you will have coverage to pay for medical bills and property damage.
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.