Business Insurance for Jam Makers

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Business insurance is designed to protect a business owner’s financial assets and is an essential investment for a jam maker.

 

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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 JAM MAKER

Example 1: As part of your business plan, you teach jam making classes to the community. During one of the classes, one of the students is badly burned, resulting in a trip to the hospital and over $10,000 in medical bills. A general liability policy should cover the students medical bills and any potential legal expenses.

Example 2: You receive notification that your business’s label is very similar to another company’s and is protected under copyright. The business that claims ownership is suing for copyright infringement. General liability insurance would cover your legal fees and any payout that is awarded as a result of this lawsuit.

Example 3: While selling your products at a local farmer’s market, a customer bumps a display, causing it to fall on another customer. The customer injures her arm and is unable to work for several weeks. General liability insurance should pay all medical costs, required follow-up rehabilitation care, and any legal payout associated with the injury.

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 jam makers in America spends between $400-$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:

Graph showing average price of general liability insurance prices per industry

Several factors will determine the price of your policy. These include your:

  • Location
  • Deductible
  • 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 JAM MAKERS 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 jam makers should obtain:

Product Liability Insurance

Product liability insurance is important for any business that creates a product and sells it to the general public. Whenever working with food, there is a possibility that a customer could get sick, causing them to miss work or incur medical bills. Product liability insurance covers damages caused by the product you sell.

Product liability insurance is tailored to the specifics of your business and the products you sell.

Home-Based Business Insurance

Many jam making businesses start out as a home-based operation, with all equipment and product stored in the owner’s primary residence. If an accident occurs as a result of business activities or the home suffers a loss, many business owners find they are uninsured or underinsured for these losses. Home-based business insurance fills in those gaps, protecting against losses a standard homeowner’s policy excludes.

Home-based business insurance is typically purchased as a part of a business owner’s policy (BOP). For an additional premium, some homeowner’s insurance policies offer this coverage as a rider (extension of coverage).

TYPES OF COVERAGE SOME JAM MAKERS MAY NEED

In addition to the policies outlined above, there are a few other types of coverage your jam making 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

If your business offers delivery services, you will need to carry the state-mandated levels of commercial auto insurance on each of the vehicles in your fleet. A commercial auto insurance policy covers business-owned automobiles driven on public roadways. Commercial auto insurance is often purchased as part of a BOP.

Workers’ Compensation Insurance

If you employ workers in your jam making business, you are likely required by state law to carry workers’ compensation insurance. Workers’ compensation covers employee medical bills should and employee sustain injuries while working. While typically not a requirement, many business owners opt to include themselves on their workers’ compensation policy.

Workers’ compensation is generally purchased 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.