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 AN ICE SKATING BUSINESS
Example 1: One of your customers falls and breaks her arm in the rink and decides to sue your business. While your company may ultimately be exonerated because customers assume a level of risk when they participate in ice skating, it is still advisable to hire an attorney to protect yourself. The general liability insurance you have will pay for your legal defense costs, including the cost of a settlement if one is necessary.
Example 2: A customer is walking into the restroom when he slips in some standing water and falls, breaking his wrist. He asks that your company pay for his medical treatment. General liability insurance would likely cover this expense.
Example 3: A competing ice rink sends you a letter informing you that your new logo is too similar to theirs. The competing company files a lawsuit against your business. Your legal defense fees would be covered by your general liability insurance policy, as would any settlements if they are required.
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, ice skating businesses in America spend between $400 - $1,100 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 ice skating businesses should obtain:
Workers’ Compensation Insurance
Most states require employers to carry workers’ compensation insurance. With a workers’ comp policy, your employees will be covered if they are injured performing work-related duties. The policy will pay for medical treatment and will help to cover lost wages for employees that cannot work due to work-related injuries.
Commercial Property Insurance
You invested a significant amount of capital to start your ice skating business. If you were to lose most or all of your equipment in an unexpected event like a fire, it would be expensive to replace. With commercial property insurance, your property is protected. You can file a claim and get help with replacement costs as long as the damage was caused by a covered event.
In addition to the policies outlined above, there are a few other types of coverage your ice skating 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
In most cases, your general liability insurance will be enough to cover your liability, but it is possible for your policy limits to be exceeded—like if you were to lose a major lawsuit. If you find yourself in a situation where your general liability insurance limits are exceeded, an umbrella policy will kick in so you don’t have to pay for the damages out of pocket.
Business Interruption Insurance
Business interruption insurance will help cover lost revenue if your business has to temporarily close due to a fire, tornado, or another covered event. This type of insurance is often offered as part of a business owner’s 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.