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 FLOWER SHOP
Example 1: A customer is admiring a potted flower when a venomous spider crawls out of the pot and bites them on the hand. The venom is non-lethal, but the wound later becomes infected. It is a rare occasion in which fairly serious medical intervention is required. If held liable, general liability insurance would probably help in covering court-mandated medical payments.
Example 2: A customer purchases a large plant in a big ceramic pot. He insists that he can carry it himself, but he trips over the door frame while moving backward, dropping the heavy pot and breaking his shin. If found liable, general liability insurance would likely provide coverage for a resulting settlement or medical payments owed through a court ruling.
Example 3: You show a customer one of your latest imports, a special exotic flower that has recently become popular in the U.S. The customer touches and smells the flower and suffers a severe allergic reaction. Rapid swelling causes her to asphyxiate before an ambulance can arrive and administer adrenaline. If her bereaved spouse took your business to court, your expenses would probably be covered by general liability insurance.
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 flower shop 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 FLOWER SHOPS 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 flower shops should obtain:
Commercial Property Insurance
A flower shop may sell a variety of accessories, but its core inventory is a collection of flowers and other flora. Plant life requires attention, care, and even some cosmetic maintenance like pruning. Such delicate products are highly vulnerable to disasters like fire and violent weather. Keep your sensitive inventory covered with a commercial property policy. Owned real estate is also covered under this insurance, allowing many businesses to get back on track after destructive natural forces push them off course.
Business Interruption Insurance
Similar to commercial property insurance, the purpose of this policy is to provide coverage for businesses that have suffered serious setbacks due to factors like fire, tornadoes, or other disasters causing storefront destruction. Business interruption insurance can help cover estimated losses in revenue during a temporary shutdown as well as any relocation costs. This type of insurance is commonly offered as part of a business owner’s policy, and it can make the difference between permanently shutting down your flower shop and suffering what is ultimately a minor setback.
TYPES OF COVERAGE SOME FLOWER SHOPS MAY NEED
In addition to the policies outlined above, there are a few other types of coverage your flower shop 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.
Home-Based Business Insurance
One of the advantages of a flower shop is that it can be run from home. You can use your own garden and/or greenhouse to grow a commercial collection of diverse flowers and other plant life. But as convenient and comfortable as it can be to run a business from home, homeowners’ insurance might not cover various business-related accidents or inventory damage. Home-based business insurance is your solution, delivering peace of mind as you run your flower business.
Workers' Compensation Insurance
As businesses grow, they pick up more inventory, more locations, and more human resources. Whether you are starting off a business with multiple employees or taking a solo business to the next level, this is a policy you’ll need to keep your workers covered. In fact, any business with part-time or full-time employees is required by law to provide workers’ compensation insurance.
With this insurance, your employees and their families are covered in the event of work-related accidents and/or fatalities.
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.