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 MILITARY SURPLUS STORE
Example 1: When getting down a large box from a high shelf, an employee’s hand slips and the box lands on a customer’s foot. General liability insurance will help you cover the cost of the resulting injuries to the customer.
Example 2: When fitting a customer for a custom-made work jacket, an employee makes a mistake in writing down the measurements. If the item of clothing causes financial loss or injuries when on the job, general liability may help cover any costs associated with the error.
Example 3: An employee is in the back room stocking shelves and does not notice a customer tracking mud and water into the store from outside. The next customer who comes in slips and fractures their ankle. General liability will likely help pay for their medical treatment if needed.
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, military surplus stores in America spend between $400 - $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.
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 military surplus stores should obtain.
Commercial Property Insurance
Your property is the cornerstone for your business. If it’s damaged in any way, commercial property insurance will cover the costs of repair and restoration. It will also cover the contents of your property, meaning it may help you repair or replace the building, grounds, and contents of your store. This insurance is typically available for events like theft, vandalism, and inclement weather.
Business Interruption Insurance
Business interruption insurance will help cover any loss of income should your military surplus store need to close for an extended period of time due to natural disaster or severe vandalism. If you operating your business in an old building or live in an area that is prone to poor weather, this insurance can be critical to keeping your business afloat if you need to close for several weeks at a time.
Workers Compensation Insurance
Workers compensation insurance covers your employees in the event they are injured on the job. If your employees are subject to particularly strenuous work, you may want to purchase coverage beyond the minimum amount required by law.
Product Liability Insurance
This form of insurance will protect you against any defective products you sell. If any of your survival equipment malfunctions in an emergency situation, it may result in a lawsuit against you. This insurance will provide you with additional protection so you can defend your business in court or settle with the customer or their family.
Professional Liability Insurance
This coverage is available to you if your employees are negligent or make a mistake while on the job. For example, if they fail to tell a customer important information about the survival products they’re buying, this insurance may help cover the expenses associated with a liability claim.
In addition to the policies outlined above, there are a few other types of coverage your military surplus store 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 Umbrella Liability Insurance
Commercial umbrella insurance is an extension of general liability coverage, allowing owners additional funds to be used if a lawsuit or claim lasts longer than expected.
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.