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.
Learn more about the risks covered by general liability insurance.
COMMON SITUATIONS THAT GENERAL LIABILITY INSURANCE WOULD COVER FOR A MOBILE DJ
Example 1: As you welcome a potential customer into your showroom, they accidentally trip over a cord and break their arm. General liability insurance coverage would cover the customer’s medical costs and any other damages in the event of a lawsuit.
Example 2: You’re unloading your equipment from a pallet jack and accidentally drop it on an uneven surface. The fall smashes a huge amp into the stage and breaks through the floorboards. Not only is the stage damaged, but the amp also rips through the venue’s existing setup. General liability insurance would cover the cost of repairs to the venue as well as replace any damaged, third-party equipment.
Example 3: You often rent equipment to other DJs as well as customers hosting their own events. While a customer reviews your inventory, a set of decks falls from a display unit onto their shoulder. General liability coverage would cover the customer’s medical costs and any other damages in the event of a lawsuit.
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
On average, mobile djs in America spend between $500 - $1,100 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 DJs 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 DJs should obtain:
Commercial Auto Insurance
Whether you have a regular gig at the coolest club in town or you work more private events, you’ll need to regularly transfer your expensive equipment between venues. Even if you use your personal vehicle, you’ll need to invest in commercial auto insurance to ensure protection in the event of an accident. Personal auto insurance does not cover damages from accidents that occur while using your car for business purposes.
Commercial Umbrella Insurance
This insurance option provides coverage beyond your current policy limits in the event of an expensive accident or lawsuit. While an umbrella coverage policy helps cover costs if you cause an accident or damage a venue, it may require you to set your other insurance policy limits at their maximum levels.
Types of Coverage Some Mobile DJs May Need
In addition to the policies outlined above, there are a few other types of coverage your mobile DJ 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 you employ part-time or full-time workers, you may be required to carry workers’ compensation insurance by state law. This insurance option covers medical expenses and other costs if an employee becomes injured on the job. Workers’ compensation insurance also covers disability and death benefits stemming from work-related accidents.
Data Breach Insurance
If you keep any customer data on file – including credit card numbers and addresses – this sensitive information may be vulnerable to cyber attacks. Data breach insurance offers peace of mind with an extra layer of protection in the event of a system breach.
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.