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.
COMMON SITUATIONS THAT GENERAL LIABILITY INSURANCE WOULD COVER FOR A JUICE BAR
Example 1: One of your customers is waiting for a juice to arrive at the serving counter and leans on the counter with his arm. A combination of a short in the wiring of one of your blenders and water on the counter causes the customer to sustain an electric shock. Your general liability insurance policy will likely cover the cost of treating his injuries as well as any legal fees should he choose to take legal action against your business.
Example 2: An employee is transporting boxes of fruit from the back to the prep area when he slips and drops the boxes on the foot of a customer, causing a fracture. The customer is angry about the accident and hires an attorney to sue your business. Your general liability insurance will pay for the costs of the customer’s medical bill and defending yourself against the lawsuit. If it is decided that settling out of court is in your best interests, the general liability insurance will pay for the settlement as well.
Example 3: You hire a local artist to create a new logo, which you then use on all of your marketing materials over the course of several months. A competitor decides that your new logo is too similar to her own and files a lawsuit against your business. The general liability insurance policy you have will pay for the legal costs associated with defending your business. It will also cover payouts or settlements if they are necessary.
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 juice bar in America spends between $500-$1,200 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.
OTHER TYPES OF COVERAGE JUICE BARS 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 juice bars should obtain:
Commercial Property Insurance
The different equipment and supplies you have in your juice bar—like your commercial blenders and refrigerators—took considerable investment to obtain. If a disaster like a fire destroys your property, commercial property insurance will help you cover the costs of replacing your equipment and supplies so you can get back to serving your customers as quickly as possible.
TYPES OF COVERAGE SOME JUICE BAR MAY NEED
In addition to the policies outlined above, there are a few other types of coverage your juice bar 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.
Workers’ Compensation Insurance
If you have employees, you are most likely required by state law to carry workers’ compensation insurance. But a workers’ comp policy does more than help you meet your legal obligations. It also ensures that you can take care of your employees if they are hurt doing a work-related task. Should they become injured, your workers’ comp policy will pay for their medical care and help cover lost wages while they are recovering from the work-related injury.
Data Breach Insurance
Also called cyber attack insurance, data breach insurance helps protect your business if you are the victim of cybercrime. For example, if your customer rewards program was hacked and customer information was stolen, you could find yourself being sued by those who were affected. Data breach insurance will protect your business by paying for your legal costs and the cost of any settlements you may need to pay to settle out of court.
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.