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 LOBSTER FISHING BUSINESS
Example 1: While offloading the day’s catch, someone trips over your cages, resulting in many visits to the doctor and a series of shots. General liability insurance should cover their medical costs.
Example 2: During a restaurant delivery, your driver backs into the client’s building, causing more damage than your auto limits allow. General liability insurance should cover the cost to repair the damaged building.
Example 3: You are overheard joking about a competitor’s product and they name you in a slander lawsuit. A general liability policy should cover your legal representation and court-awarded damages.
Example 4: As part of the business’ expansion, you’ve applied for a loan. General liability insurance should help fulfill the evidence of liability insurance loan requirement.
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, lobster fishing businesses 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:
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 lobster fishing businesses should obtain:
Product Liability Insurance
Product liability insurance is important for businesses that sell, supply, or manufacture, products.
If a customer blames your company due to accident or injury, they can name you in a lawsuit. This policy would cover awarded damages and associated legal fees. You can speak with an insurance professional to tailor this policy to your needs.
This coverage is generally sold as part of a business owners policy (BOP).
Workers Compensation Insurance
State law requires businesses to carry workers compensation insurance on all payroll employees. When injured on the job, the policy offers medical coverage, paying a portion of the employee’s lost wages while unable to work.
Workers compensation insurance is often purchased as a standalone policy.
Commercial Property Insurance
This industry requires investment in expensive equipment. If your business operates out of a commercial building, you may need to purchase a commercial property policy. This policy indemnifies the insured, should a covered loss occur. In addition to repairing the damaged structure, it protects business property lost or stolen from the premises.
To cover damaged, lost, or stolen property used away from the business premises, consider an inland marine policy.
You can purchase commercial property insurance as part of a business owner’s policy (BOP).
Like automobiles, insurance requires separate coverage for watercraft. Watercraft insurance covers boats damaged during business operations up to the agreed upon value. You can also include liability coverage in such a policy. An insurance agent can help you determine the exact coverage and endorsements best meet their needs.
In addition to the policies outlined above, there are a few other types of coverage your lobster fishing 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
If an unexpected loss halts the daily operations of your business, you and your staff could face serious financial impact. Business interruption insurance provides fixed expenses and loss of income while a business recovers after a major loss. In addition to setting the business up in a temporary location and providing coverage for associated extra expenses, it helps supplement the lost income during the recovery time.
Business interruption insurance is usually offered in a business owners’ policy (BOP). This policy is also known as business income and extra expense insurance.
Commercial Auto Insurance
If you or a team member get in an auto accident doing business-related activities, commercial auto insurance can pay for the repairs to damaged vehicles, as well as medical expenses, liability claims, and lost equipment.
You can purchase commercial auto insurance as a standalone policy or as part of a business owner’s policy (BOP).
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.