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 HIKING TOUR BUSINESS
Example 1: A client experiences a snake bite while on a hike after an instructor fails to adequately communicate the dangers in an area. General liability insurance will likely cover the cost of their medical bills.
Example 2: All of your professional equipment is ruined after a major storm occurs during a hike. General liability insurance will likely help you recover the costs of your equipment.
Example 3: When transporting guests to the trail, your commercial vehicle damages a welcome center structure. General liability insurance will likely help pay to restore the facility to its original condition.
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, hiking tours 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 hiking tours 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 hiking tours should obtain.
Commercial Property Insurance
If you use commercial space to receive hikers before they leave and welcome them when they return, you’ll need commercial business insurance to cover the structure in case of damage. This insurance also covers any equipment or merchandise in the building against natural disaster or theft.
Business Interruption Insurance
If you mainly conduct tours in an area that’s prone to flooding, earthquakes, erosion, or other natural phenomena that may result in canceled tours, business interruption insurance can help you cover your loss while you are unable to operate your business.
Workers' Compensation Insurance
No matter how experienced your trail guides are, they may injure themselves when they’re out for a hike. Whether it’s a sprained ankle or a broken leg, workers’ compensation will cover the cost of medical expenses for on-the-job injury.
Professional Liability Insurance
Professional liability insurance protects your business and employees in the event that someone makes a mistake on the job. For example, if a trail guide misinforms a client regarding which plants are safe to touch and this results in someone getting poison oak, professional liability insurance may cover any expenses that stem from negligence or employee error.
Types of Coverage Some hiking tours May Need
In addition to the policies outlined above, there are a few other types of coverage your hiking tour 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.
Commercial Umbrella Liability Insurance
Commercial umbrella insurance covers the costs of major liability claims. If a hiker has a fatal accident under your care, this insurance will take care of any legal costs that stem from the death. If the business has to take drastic measures to restore their reputation, commercial umbrella insurance will also cover the costs associated with positive PR for the company.
Commercial Auto Insurance
If you use a commercial vehicle to transport hikers to and from different trails, you’ll need commercial auto insurance to cover both the vehicle and any resulting injuries your clients may sustain.
If your clients book their hiking tours online, data-breach insurance can help cover costs in case your website is hacked. This insurance is highly recommended for businesses that mainly serve tourists, as tourists are more likely to set up their tours prior to arriving in the general area.
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.