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 NERF ARENA
Example 1: You’re leading a group of potential new vendors through the arena when one trips over an extension cord that wasn’t taped down properly. He hits his head and breaks his wrist in the fall and needs immediate medical attention. General liability insurance will likely pay for his medical costs and your legal fees if there is a lawsuit.
Example 2: An employee is bringing in a new load of nerf guns and other accessories when he loses control of the dolly. The dolly slams into a group of customers, and several sustain serious injuries. Your general liability policy will likely cover their medical bills and any settlement payouts awarded in a lawsuit.
Example 3: After redesigning your logo, you put up new signage in front of your building and in the parking lot. About a month later, you receive a call from your nearest competitor accusing you of stealing their design. General liability insurance will likely pay for your legal fees if they decide to sue and any subsequent payout settlement.
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, nerf arenas in America spend between $400 - $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 Nerf Arenas 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 nerf arenas should obtain:
Workers’ Compensation Insurance
Operating a nerf arena exposes your employees to a unique set of risks each day. Workers’ compensation insurance will protect your employees if they sustain an injury while at work. It will help to pay for their medical bills as well as any disability and death benefits. Most states legally require businesses with employees to carry this coverage.
Commercial Property Insurance
It takes a lot of specialized equipment, tools, furniture, computer systems, and inventory to successfully operate a nerf arena. And if these valuable items are destroyed in a fire or other disaster, you could be forced financially to shut your doors permanently. Commercial property insurance will help to cover the cost of repairing or replacing these important items so that you can get back to business as usual.
Types Of Coverage Some Nerf Arenas May Need
In addition to the policies outlined above, there are a few other types of coverage your nerf arena 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.
Employment Practices Liability Insurance
This important coverage can help to protect your business against claims made by your employees. If an employee alleges that they have been discriminated against or they have been the victim of harassment, your company could be held liable for extensive damages. Depending on the size of your nerf arena company, employment practices liability insurance or EPLI may be offered as an endorsement to your business owner’s policy (BOP).
Commercial Umbrella Insurance
There may come a time when an accident or lawsuit exhausts your primary policy limits. Without additional protection, you could be left to cover the additional costs out-of-pocket. Commercial umbrella insurance works to go above and beyond your primary insurance 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.