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 HOUSE PAINTING BUSINESS
Example 1: During a home renovation project, your painter accidentally spills a can of paint all over the client’s floor. They are suing you to replace the floor and for the cost of temporary housing while the project is completed. Your general liability policy should cover the damages as well as any associated legal fees.
Example 2: While on break, a painting ladder is left out and the homeowner trips over it, breaking his wrist. A general liability policy should cover their medical costs and other damages they might be seeking.
Example 3: A paint deliveryman slips and falls on your shop’s freshly mopped floor, tearing a tendon in his knee. General liability insurance should cover his medical expenses and your potential 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.
On average, house painting businesses in America spend between $500 - $1,500 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.
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 house painting businesses should obtain:
Inland Marine Insurance
Inland marine insurance is particularly important for contractors and construction professionals who travel from site to site with their equipment and tools. Be sure to discuss the limitations of the policy with your insurance representative to ensure proper coverage, regardless of where your business property is used and stored.
Inland marine policies are often offered as part of a business owner’s policy.
Commercial Auto Insurance
Commercial auto insurance will cover the cost of repairing your vehicle if you are involved in an accident. If you are at fault, it will also cover the cost of damage to other vehicles and medical expenses for anyone injured.
In addition to the policies outlined above, there are a few other types of coverage your house painting 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 Insurance
As a house painter, you could potentially work on very high-valued homes and businesses, leaving you exposed to increased liability expenses. If a lawsuit arises that exceeds the limits of your underlying general liability policy, you could be held personally responsible for a portion of that lawsuit. Commercial umbrella liability insurance offers an added layer of protection, paying damages awarded that surpasses the limits of your primary policy.
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.
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.