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 NUTRITIONIST
Example 1: A client is visiting your place of business for nutrition advice when she slips and falls on some ice outside your door. She breaks her hip and requires immediate medical care. She asks that you pay for her treatment. Your general liability insurance policy would likely cover this cost.
Example 2: Your receptionist is stocking shelves in your store with supplements when she accidentally bumps into a client. The client falls down and hits his head, sustaining a concussion. He decides to sue your business. The general liability insurance policy you carry will pay for your legal defense, including the cost of hiring an attorney and the cost of a settlement if one is required.
Example 3: You have just started using a new logo when you get a letter from an attorney stating that it is too similar to the one used by another business. The other business is suing your company for damages. Your general liability insurance will pay for your legal fees, including the cost of an attorney and the cost of a settlement if you settle out of court.
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 nutritionist in America spends between $350-$750 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 NUTRITIONISTS 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 nutritionists should obtain:
Professional Liability Insurance
As a nutritionist, you give professional advice to all of your clients. There is always the possibility that one of those clients could claim they were harmed by your advice and recommendations. If they decide to sue your business, professional liability insurance will pay for your legal defense as well as any settlement costs.
Product Liability Insurance
The supplements and other products you sell to your clients are supposed to help them lead healthy lives, but there is always the possibility that one of your products could cause harm—or perceived harm. If a client decides that your product caused him or her harm and sues your business, your product liability policy will pay for your legal fees and cover the cost of a settlement if you settle out of court.
TYPES OF COVERAGE SOME NUTRITIONISTS MAY NEED
In addition to the policies outlined above, there are a few other types of coverage your nutrition company 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 have employees, chances are your state requires that you carry workers’ compensation insurance. If an employee is injured performing work-related duties, they can get medical treatment for the injury through workers’ comp. The policy will also help to pay for lost wages if the employee cannot work due to the injury.
Commercial Umbrella Insurance
An umbrella policy is designed to pick up where a general liability insurance policy leaves off. There are circumstances where the policy limits of general liability insurance can be exceeded—like if you lose a big lawsuit and must pay significant damages. Instead of having to pay the remaining damages out of pocket, you can rely on your umbrella policy to cover them until the limits of the policy are reached.
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.