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.


Example 1: There is an altercation during a karaoke contest in which three people are injured and some personal property is damaged as well. Two people are suing for medical costs, and one is suing for damaged property. Your general liability insurance should cover these costs. It’s important to note that some general liability policies have an “expected or intended injury” exclusion. Discuss this with your insurance agent prior to purchasing.

Example 2: Your redesigned logo catches the eye of a business owner with a very similar copyrighted logo. He claims you are guilty of copyright infringement and threatens to sue. A general liability policy would cover the costs of defending yourself in the lawsuit, as well as any potential payout.

Example 3: You are trying to get a loan to expand the karaoke bar, but the bank requires all customers to carry a minimum amount of general liability insurance. Having a policy would help ensure your loan eligibility.

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, karaoke bars in America spend 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:

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.

Recommended action box icon

How much will the right insurance cost you?

Find what business insurance will cost for your business right now

Get a Free Quote

Other Types Of Coverage Karaoke 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 karaoke bars should obtain:

Liquor Liability Insurance

Many general liability policies exclude coverage for events related to alcohol. Therefore, it is recommended that all bar owners purchase liquor liability insurance. This will ensure proper coverage should a lawsuit arise that falls within the fine line between liquor liability and general liability coverage.

Commercial Property Insurance

Commercial property insurance will help cover the cost of repairing damage to owned real estate or replacing equipment and inventory that is damaged in a covered event, such as a fire.

Workers’ Compensation Insurance

While coverage requirements vary, most states requires businesses to carry workers’ compensation for each employee. In the event of an accident at work, the policy would cover medical expenses incurred by your team member. Additionally, workers’ compensation insurance offers coverage for attorney’s fees, settlements, and the employee’s lost wages.

Workers compensation is most often purchased as a standalone policy.

Types Of Coverage Some Karaoke Bars May Need

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

Business Interruption Insurance

Your insurance company may offer business interruption as part of their business owners’ policies (BOP). Should a major loss occur, such as in the event of a hurricane, this policy would assist in getting the business back to serving customers again. It can cover the costs of moving to a temporary location and can also make up a portion of revenue that is lost while your business is not operating.

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.