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 LAMAZE CLASS BUSINESS
Example 1: A customer slips on the ice in your parking lot and breaks a bone. She has named both you and the building owner in a lawsuit, asking for compensation for the injury. General liability insurance should cover legal expenses and court-ordered damages.
Example 2: You have applied for a loan to expand your business's operating space. Your general liability policy should fulfill the terms of the bank loan.
Example 3: One of your employees criticizes a competing Lamaze class in a neighboring town. They accuse your business of slander. General liability insurance should cover your legal fees.
Example 4: You use a picture protected under copyright law on your new website. The photo’s owner has named you and the site builder in a copyright infringement lawsuit. General liability insurance should pay your attorney’s fees, associated costs, and awarded damages.
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, lamaze classes 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 lamaze classes businesses should obtain:
Professional Liability Insurance
Your clients rely on your professional expertise to ensure labor goes as planned. If they feel harmed in any way from your advice, regardless of the claim’s merit, you could be named in a negligence lawsuit. Professional liability insurance helps fill in any legal liability gaps, ensuring you have representation and covered for court-awarded damages.
This type of policy is also known as Errors and Omissions (E & O) insurance.
Commercial Property Insurance
From buildings to estates, business owners can tailor commercial property insurance to meet their needs. It covers the cost to replace, rebuild, or repair owned business property damaged in a covered loss.
Because this policy has specific exclusions, business owners who are leasing should review the terms of their lease with an insurance professional to identify any other beneficial endorsements.
You can purchase commercial property insurance as part of a business owner’s policy (BOP).
In addition to the policies outlined above, there are a few other types of coverage your lamaze class 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.
Workers Compensation Insurance
Each state requires that business owners carry workers compensation insurance on their employees. If a worker gets injured on-the-job, the policy would pay part of their lost wages while out of work, as well as medical bills stemming from the incident. For extensive injuries that result in lawsuits, it also ensures the business owner proper defense in court.
Workers compensation is often purchased as a standalone policy.
Commercial Umbrella Liability Insurance
Medical-related illnesses and injuries in this industry are often emotional, with victims seeking others to blame. If you are ever named in a lawsuit that becomes lengthy and costly, you can exhaust the limits of your underlying general liability policy. An umbrella policy picks up where other liability coverages leave off, paying associated legal fees and court-awarded damages.
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.