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 KENNEL
Example 1: A dog in your care eats the wrong food and suffers an allergic reaction and asphyxiates while employees are busy managing other pets. The dog’s owner sues your business for damages, including the loss of an expensive breed and psychological shock. If found liable, general liability insurance would likely be able to help cover these losses as ordered by a court or settled upon privately.
Example 2: While a kennel area is being cleaned, its resident dog is placed temporarily in another dog’s caged area. The dogs seem friendly at first, but suddenly begin fighting. One of the dogs comes away with significant injuries, requiring immediate medical attention. If found liable, your business could probably be covered by general liability insurance for medical damages owed or a settlement with the injured dog’s owner.
Example 3: A dog is so excited by its owner’s return that it behaves rambunctiously in the passenger seat as they drive away from your kennel. In your parking lot, the owner’s vision is blocked when the dog jumps into her lap, causing her to collide with a passing vehicle. If found liable for any vehicle damages or occupant injuries, general liability insurance would likely assist your business in covering some of the payments mandated or settlements reached.
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 kennel in America spends between $300-$700 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 KENNELS 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 kennels should obtain:
Commercial Property Insurance
A kennel is full of equipment for animal care, including food, animal soaps, toys, mobile kennel containers, and more. While the chief concern in cases of destructive fires or violent weather would be the safety of the animals, your business should still be protected against disastrous damages to its property. Particularly if you own the commercial real estate on which your business operates, this is a policy that will prove invaluable for businesses trying to recoup significant losses. Commercial property insurance helps cover the costs of replacing/repairing inventory, equipment, real estate, and more in the event of unexpected damage.
Commercial Umbrella Insurance
For a business that operates on commercial property and cares for the beloved furry friends of its trusting clientele, commercial umbrella insurance is an important policy to take out. A kennel stands to lose quite a bit when disaster strikes. Between replacement costs and damage compensation for injured/deceased animals in their care, a kennel could find itself in serious trouble when the cost of the coverage is simply too high for normal insurance policies.
Commercial umbrella insurance exists to cover those gaps beyond existing policies, ensuring that your kennel business doesn’t find itself crippled by an extreme and unpredictable loss.
TYPES OF COVERAGE SOME KENNELS MAY NEED
In addition to the policies outlined above, there are a few other types of coverage your kennel 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
Some kennels are more involved, taking pets for little trips or events to keep them happy and exercised. If your kennel business wants to include dog-walking or park play in its offered services, you’ll need commercial vehicles. This insurance policy will cover automotive damages incurred when your pet van or similar automobile is damaged on the road.
Home-Based Business Insurance
If your kennel business is run from home, it’s a great way to save on the costs of renting/acquiring a place of business, especially for a business like this one with such specific needs for its operating grounds. However, when running a business from home, your normal home insurance policies may not cover accident damages related to your business. Home-based business insurance is designed with this in mind, and it is often available through a business owner’s policy or as a rider extension for existing homeowner insurance.
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.