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 HOT TUB GARDEN
Example 1: Your employee uses too many chemicals when caring for the hot tubs, causing severe chemical burns on several people. As a result, there are several lawsuits against the business for damages. General liability will cover your cost for legal representation and damages awarded by the courts.
Example 2: A client slips when getting out of the hot tub. The resulting concussion has left her out of work for several weeks, and she has accrued a mountain of medical bills. She is seeking reparations from your business. Your general liability insurance should cover her medical bills as well as any potential lawsuit expenses on your part.
Example 3: The business that built your new website used a photo covered under copyright law. They are suing you and the site designer for copyright infringement. Your general liability policy will pay for your legal expenses and the damages the courts have ordered you to pay.
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, hot tub gardens in America spend between $350 - $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.
How much will the right insurance cost you?
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Other Types of Coverage hot tub gardens 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 hot tub gardens should obtain:
Commercial Property Insurance
Owning a business in this industry requires investment in expensive equipment. To protect your investment, owners should purchase a commercial property insurance policy. In the event of a loss, this policy would pay to repair or replace the building and its business contents.
If your space is a rental, you will still want to purchase a commercial property policy. Coverage will be limited to business property kept onsite. Some leases now require renters to cover certain parts of the building, such as air conditioning units. Review the terms of your lease with your insurance agent to identify any other beneficial endorsements.
Workers Compensation Insurance
State law requires that businesses carry workers compensation insurance for anyone that is on the payroll. It provides protection for employees with on-the-job injuries, paying both their medical bills and lost wages. Additionally, if an accident results in a lawsuit, the policy affords legal representation to the business owner.
Workers compensation is generally purchased as a standalone policy.
Types of Coverage Some hot tub gardens May Need
In addition to the policies outlined above, there are a few other types of coverage your hot tub garden 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.
Business Interruption insurance
Most small business owners rely on steady revenue to pay their ongoing professional and personal expenses. If the company shuts down for an extended period after a loss, business interruption insurance can help keep the company afloat during repairs.
This coverage is often offered as part of a business owners’ policy (BOP) package.
Commercial Umbrella Liability Insurance
Organizations facing higher liability risks should purchase a commercial umbrella liability policy. If a lawsuit exhausts the limits of the underlying general liability policy, the umbrella policy will take over. This added layer of coverage protects your assets, helping to ensure your personal finances are not in danger.
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.