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 HORSEBACK RIDING LESSONS BUSINESS
Example 1: One of your horses gets loose from the stable and a vehicle hits it, causing extensive damage. The owner of the vehicle is seeking payment for damages and has named your company in a lawsuit. General liability insurance should cover the cost to repair or replace their vehicle, personal injury claims stemming from the lawsuit, and your legal expenses.
Example 2: One of your client’s horses suffers an injury during a lesson and they are blaming your business for the incident. The business owner can turn to their general liability policy for damages awarded by the courts.
Example 3: Your employee was overheard at a dinner party insulting the other horseback riding lessons business in town. They are suing your company for defamation of character, claiming their business has suffered as a result.
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, horseback riding lessons businesses in America spend between $300 - $700 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 horseback riding lessons 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 horseback riding lessons businesses should obtain:
Professional Liability Insurance
Both humans and horses are unpredictable, leaving much room for unexpected incidents. If a client claims your company did not deliver the agreed upon services, they could hold you liable. Professional liability insurance offers protection against these claims.
Due to the significant liability exposure, businesses should address any potential coverage gaps with their insurance professional and inquire if a policy is claims-based or occurrence-based.
Workers Compensation Insurance
The above policies cover your assets and clients, but not your employees. The state requires carrying workers compensation insurance for staff, which covers medical bills and lost wages if they experience an on-the-job injury or illness. Due to a higher risk for injury, business owners should carry coverage limits higher than their state’s legal minimum requirements.
Workers compensation is generally purchased as a standalone policy.
Types of Coverage Some horseback riding lessons businesses May Need
In addition to the policies outlined above, there are a few other types of coverage your horseback riding lessons 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 Auto Insurance
This business venture will likely take you on the road from time-to-time. When you use a vehicle for business purposes, insurance carriers require a commercial auto policy, excluding business-related accidents on a personal auto policy. This policy covers damage to your auto, as well as other damaged vehicles and injured parties, should you cause an accident. Most states regulate the minimum coverage required, leaving many underinsured and exposed to potential lawsuits. Your insurance professional can assist in determining the best coverage limits for your needs.
You can purchase commercial auto insurance as part of a business owners’ policy (BOP) or as a standalone policy.
Commercial Umbrella Liability Insurance
There are so many factors that are out of your control. Horseback riding lessons businesses can add another layer of protection against liability claims with a commercial umbrella policy. This policy picks up if you exhaust the underlying general liability policy limits.
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.