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 HOSPICECOMPANY
Example 1: While visiting a resident, a family member slips on some ice in the parking lot and falls. They fracture their wrist and hit their head on the icy pavement. General liability insurance would likely cover the injuries sustained during the fall.
Example 2: A patient uses the restroom on their own and trips over the wastebasket. Their fall results in multiple abrasions that need to be treated as well as other injuries. General liability insurance would likely provide protection against lawsuits arising from the incident.
Example 3: An employee carelessly claims your hospice facility is the “top” facility in the area on social media. They have no evidence to back up the statement, and another facility files a lawsuit over the claim. General liability insurance would probably cover the resulting legal fees.
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 hospice company in America spends between $300-$800 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.
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OTHER TYPES OF COVERAGE HOSPICE COMPANIES 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 hospice companies should obtain:
Commercial Property Insurance
Hospice facilities need commercial property insurance for their buildings and equipment. Property insurance also covers supplies and inventory kept at a facility.
When selecting commercial property coverage, don’t consider only the value of your facility’s building. Make sure you also get enough protection for the full value of the facility’s medical equipment, which is likely tens of thousands of dollars or more.
Commercial property insurance is included in most business owner’s policies (BOPs).
Professional Liability Insurance
Businesses that provide medical care for patients can face expensive malpractice lawsuits if one of their employees makes a significant mistake in a patient’s care. Professional liability insurance protects against error-related lawsuits like malpractice suits.
Many people provide medical care to patients at hospice facilities. Check to see that your facility’s policy covers everyone who provides care, including all technicians, aides, nurses, and physicians.
Professional liability insurance is included in some package policies and is available by itself.
Workers’ Compensation Insurance
Businesses that employ workers are usually required by state law to provide workers’ compensation insurance for their employees. This insurance covers work-related injuries.
Data Breach Insurance
Keeping electronic medical records is required by law, but it leaves businesses exposed to potential online security risks. Data breach insurance protects against system intrusions and non-criminal data breaches.
Data breach insurance is included in some package policies and is available by itself.
TYPES OF COVERAGE SOME HOSPICE COMPANIES MAY NEED
In addition to the policies outlined above, there are a few other types of coverage your hospice company 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
If your hospice facility uses a company-owned bus or van to transport patients, the vehicle must be insured with commercial auto insurance. State laws require that all vehicles driven on public roads be insured.
Commercial auto insurance is included in some package policies and is available by itself.
Commercial Umbrella Insurance
Malpractice lawsuits and other liability claims can involve expensive legal fees and settlements. Commercial umbrella insurance offers extra liability protection for expensive lawsuits.
Commercial umbrella insurance is included in some package policies and is available by itself.
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.