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 MOBILE BARTENDER
Example 1: While bartending an event, a guest was served two shots of tequila and three beers. While leaving the party, he runs off the road, hitting a parked car and a street sign in the process. The driver was seriously injured, resulting in over $60,000 in medical costs, $4,000 damage to his vehicle, and $2,000 to the city’s street sign. While each state has its own rules regarding what type of policy would cover this loss, they all agree on one detail; a general liability policy must be in place for any coverage to kick in.
Example 2: The host of an event has asked you to provide a specialty drink for each guest to try. The cocktail is made with lemon zest. Unaware of its contents, one guest drinks several sips before realizing it contains lemon, which she is highly allergic to. She is rushed to the hospital, where she is treated for anaphylactic shock. General Liability insurance would your legal costs in the matter.
Example 3: A museum is hosting a fundraising event and they have hired your company to serve wine and beer to its guests. Upon leaving the party, a guest runs off the road and hits a city worker who was picking up trash on the side of the road. His family sues for medical expenses, pain, and suffering. While additional policies may apply, your business must carry General Liability coverage to assist in paying for this loss.
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 mobile bartender in America spends between $350-$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 MOBILE BARTENDERS 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 mobile bartenders should obtain:
Commercial Auto Insurance
Since you will be driving your bar on public roadways, you are mandated by the state to carry a commercial auto policy. Auto insurance protects not only your vehicle but any liability you may have in an accident. Your personal car insurance will not cover you if you are driving the tow truck, even if you are off duty.
Liquor Liability Insurance
Also known as dram shop insurance, liquor liability coverage is necessary for anyone in the business of selling and/or serving alcohol. It covers medical payments, court settlements, and legal fees associated with the incident. To purchase this policy, you must have a General Liability policy as underlying coverage.
TYPES OF COVERAGE SOME MOBILE BARTENDERS MAY NEED
In addition to the policies outlined above, there are a few other types of coverage your mobile bartender 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
If your towing company has any employees (full-time or part-time), you are legally required to carry workers’ compensation insurance. This type of coverage will help compensate your employees in the case that they get injured on the job.
Business Interruption Insurance
In the event of a fire, flood, or other catastrophes, there is a good chance your business operations will be halted for some time. Business interruption coverage is designed to help you recoup a portion of the revenue your business would lose due to the inability to operate.
This type of insurance is typically included in a business owner’s policy.
Commercial Umbrella Insurance
Umbrella coverage allows you to extend above and beyond the standard limits of your other business insurance policies. If you are faced with a large lawsuit or other claim situation, there’s a possibility that the coverage limits of your standard policies will be insufficient. In this case, your umbrella policy will allow you to surpass these limits.
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.