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 KIOSK BUSINESS
Example 1: While a customer is looking at your merchandise, one of the new displays falls on him and his child. Both sustained minor injuries but are suing because of the incident. General liability insurance would pay for legal representation and other related costs, as well as damages awarded by the court.
Example 2: You are moving the kiosk to clean underneath it and cause a large gash in the mall’s tile floor. General liability insurance should pay to repair or replace the damaged floor.
Example 3: The mall you have applied to set up in requires evidence of liability insurance. A general liability policy should help you meet those requirements.
Example 4: The floor near your kiosk is slippery and a mall patron falls, breaking her arm. She names both you and the mall in a lawsuit, seeking reimbursement for her medical bills and to replace the merchandise broken in her fall. General liability insurance should pay your legal fees and associated costs, including the financial obligation the courts indicate you are responsible for.
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, kiosk businesses in America spend between $300 - $800 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 kiosk businesses should obtain:
Product Liability Insurance
Product liability insurance is important coverage for any business owner who manufactures, distributes, or sells merchandise. If a customer claims harm from a product you sell them, regardless of merit, they can sue you in a court of law. This policy will ensure your representation in court and pay damages awarded by the court.
This policy is generally sold as part of a business owner's policy (BOP) and you can tailor it to the unique needs of your business.
Commercial Property Insurance
As a kiosk owner, you keep your business property, including inventory, on a non-business owned property at all times. While you would not be responsible for the repair of the property, it is up to you to insure your items should a loss occur.
Your insurance agent can assist you in determining which business owner’s policy (BOP) is appropriate for your business’ specific needs.
In addition to the policies outlined above, there are a few other types of coverage your kiosk 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.
Business Interruption Insurance
Also known as business income and extra expense, this insurance provides fixed expenses and loss of income while a business works to recover after a major structural and/or equipment loss. It will help set the business up in a temporary location, provide coverage for associated extra expenses, and help supplement lost income during recovery time.
This insurance is generally offered as part of a business owners’ policy (BOP) package.
Workers Compensation Insurance
The state requires businesses to carry workers compensation insurance for employees. If an on-the-job injury or illness occurs, the policy covers the injured party’s medical expenses and a percentage of wages lost while out of work. If a lawsuit arises due to the injury, the policy should also cover the business owner’s legal fees and court-ordered damages.
Most insurance companies write workers compensation as a standalone policy.
Employee dishonesty, fraud, and forgery claims are all excluded on a standard business owner’s policy. Crime insurance provides coverage should a loss occur, reducing the chances of a gap in coverage.
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.