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 PAINTBALL ARENA
Example 1: During a match, a wall falls on a player and they are taken to the hospital for evaluation. General liability insurance would likely cover medical treatment associated with any injuries sustained in the accident.
Example 2: When setting up a paintball gun for a customer, an employee accidentally punctures a carbon dioxide cylinder’s seal without properly securing the cylinder. The cylinder takes off like a missile and strikes a customer in the back of the head, knocking them to become unconscious. General liability insurance would likely cover any medical bills or a lawsuit filed over the accident.
Example 3: A team of paintballers drives some distance and books a hotel for a special tournament, only to find that the tournament has been canceled on the day of. They file a false advertising lawsuit seeking compensation for the travel costs incurred. General liability insurance would probably cover the 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
The average paintball arena in America spends 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.
OTHER TYPES OF COVERAGE PAINTBALL 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 paintball arenas should obtain:
Commercial Property Insurance
Paintball arenas need commercial property insurance to protect their buildings and other physical assets. The insurance can be used to insure buildings, secondary structures, equipment, and supplies.
When selecting a commercial property policy, make sure the policy provides coverage for all of your arena’s structures and equipment. This includes any features you’ve built in the combat area as well as any equipment that’s rented or supplies that are sold to customers.
Commercial property insurance is commonly purchased as part of a business owner’s policy (BOP).
Workers Compensation Insurance
Most paintball arenas have employees and therefore need workers compensation insurance. Workers compensation insures against job-related injuries, which employees who participate in paintball competitions are at an increased risk for. Most states require businesses that have employees to carry the coverage.
Product Liability Insurance
Assuming your paintball arena sells or rents paintball guns, paintballs, and safety equipment, the business should have product liability coverage. This coverage protects against lawsuits arising from accidents caused by malfunctioning equipment that a business sells or rents.
Product liability coverage can be acquired as a standalone policy or as part of a package policy.
TYPES OF COVERAGE SOME PAINTBALL ARENAS MAY NEED
In addition to the policies outlined above, there are a few other types of coverage your paintball 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.
Commercial Umbrella Insurance
Commercial umbrella insurance gives businesses additional liability protection. The coverage acts as a secondary form of liability coverage, covering claims after any underlying policies’ limits have been reached.
Because paintball is a potentially dangerous activity that can result in severe injury or death, commercial umbrella insurance is a coverage that you may want. If your business ever faces a major lawsuit as a result of a terrible accident, the coverage could help with legal and other costs.
Commercial umbrella insurance can be acquired as a standalone policy or as part of a package policy.
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.