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 GOLF COURSE
Example 1: One of your caddies leans a player’s clubs against his car, and they fall over just as another car is passing by. The car runs over and crushes the clubs. The client demands that your business pay to replace them. Your general liability insurance policy would cover this expense.
Example 2: A section of pathway washed away in a storm the previous night. A visitor to your course fails to see the damage and stumbles, falling and breaking her wrist. She demands that your company pay for her medical treatment. A general liability policy would likely cover her medical bills.
Example 3: One of the players on your course is hit in the eye by a golf ball and sustains serious injuries. He sues your golf course for damages. While you may ultimately be exonerated, since players assume a certain level of risk as part of their participation, you still need to defend yourself legally. Your general liability insurance would pay for your legal fees, including the cost of a settlement if one is necessary.
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, golf courses in America spend 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 golf courses 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 golf courses should obtain:
Workers’ Compensation Insurance
Most states require you to carry workers’ compensation insurance if you have employees. If an employee is hurt performing job-related duties and requires medical care, workers’ comp will pay for that care. It will also help to pay for lost wages while the employee recovers from their injuries.
Commercial Property Insurance
You have likely invested significant capital in the equipment and supplies you need to run your golf course. If you were to lose most or all of your commercial property, it would be expensive to replace. But if you have adequate commercial property coverage, your insurer will help to cover the cost of replacing your property if it is damaged in a covered event like a fire.
Types of Coverage Some golf courses May Need
In addition to the policies outlined above, there are a few other types of coverage your golf course 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
The general liability insurance you carry is sufficient for most circumstances, but there are times where the limits of a general liability insurance policy can be exceeded—like if you lose a major lawsuit. A commercial umbrella insurance policy is designed to pick up where your general liability insurance leaves off. Once the limits of the general liability insurance are exceeded, the umbrella policy will kick in.
Commercial Auto Insurance
If you have a vehicle that you use primarily for business purposes, you need a commercial auto policy. Most states require you to carry commercial auto for business vehicles. With your policy, you will have protection in the event of an accident. The policy will pay for repairing or replacing your vehicle as well as for injuries sustained in an accident. It will also pay for damages and injuries for others if you are at fault in an 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.
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.