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 ICE SCULPTURE BUSINESS
Example 1: Your team fails to take proper precautions when setting up an ice sculpture. As a result, the melted ice leaks all over the floor, causing extensive damage to the venue’s flooring. General liability insurance should cover the cost to repair the flooring and offer legal representation should a lawsuit arise.
Example 2: A local convention requires participants to provide evidence of liability insurance. Your general liability policy will fulfill this obligation.
Example 3: At an event, your employee is overheard insulting a competitor. They are suing your business for defamation, claiming their business has suffered as a result. General liability insurance should cover legal expenses and awarded damages, up to the limits of the policy.
Example 4: A potential client trips over your welcome mat while visiting the office. They are asking for you to cover their medical bills. A general liability policy should cover their bills as well as any potential lawsuit expenses on your part.
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, ice sculpture businesses in America spend between $400 - $1500 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 ice sculpture 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 ice sculpture businesses should obtain:
Product Liability Insurance
Your customers have great expectations regarding the products and services you offer. If they feel your products have harmed them, they could sue you in a court of law. Product liability insurance will ensure you're represented in court, and will pay damages awarded by the court.
This coverage is generally sold as part of a business owner's policy (BOP), and you can tailor it to the unique needs of your business.
Commercial Property Insurance
Commercial property insurance is essential for protecting your business assets, including the physical space and its contents. If damage occurs due to a covered loss, the policy would pay to repair or replace damaged items. It does not cover non-owned buildings. However, there are additional endorsements you can add to provide coverage for parts of the building you are responsible for due to the lease agreement.
Commercial property insurance is usually purchased as part of a business owner’s policy (BOP).
Types of Coverage Some ice sculpture businesses May Need
In addition to the policies outlined above, there are a few other types of coverage your ice sculpture 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
Delivering an ice sculpture is a delicate process that only you and your staff should carry out. If you or a team member gets in an accident while conducting business activities, a commercial auto policy would cover the loss, up to the limits of the policy. Coverage includes repair of damaged vehicles, medical expenses, and damage to equipment. While your state mandates minimum auto insurance limits, business owners should examine their unique needs to determine the right limits for their policy.
You can purchase commercial auto insurance as a standalone policy or as part of a business owner’s policy (BOP), depending upon the carrier.
Workers Compensation Insurance
Each state requires that businesses cover all payrolled employees under worker's compensation insurance. This covers on-the-job injury and illness, paying the injured party’s medical expenses and wages lost while out of work. If the employee decides to sue over their injuries, workers compensation will also cover the cost of your legal fees and awarded damages.
Most insurance companies write workers compensation as a standalone policy.
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.