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 PEST CONTROL COMPANY
Example 1: While treating the home of a customer, your employee accidentally spills pesticide all over an expensive entertainment system. With a general liability insurance policy, you are able to cover the costs of replacing the customer’s equipment without needing to pay for the replacement costs yourself.
Example 2: Your employee fails to provide information about the dangers of pesticides to a customer, and her dog gets sick from them. The dog requires expensive veterinarian care, which the customer demands that you pay for. A general liability insurance policy will cover the costs of treating the dog, as well as any potential lawsuits that arise.
Example 3: While searching for the source of a pest problem in a customer’s home, you accidentally knock over a china cabinet filled with heirloom china. Most of the dishware shatters, and the cabinet breaks. Your general liability insurance policy will cover the costs of these damages, up to the limits of your policy.
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 pest control company in America spends between $400-$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.
OTHER TYPES OF COVERAGE PEST CONTROL COMPANIES 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 pest control companies should obtain:
Commercial Property Insurance
Commercial property insurance is there to provide protection for your commercial property, such as your pest control equipment and supplies. If you were to lose your property in a fire, storm, or another covered event, your policy would pay for you to replace that property up to the limits of your policy. Commercial property insurance can provide much-needed assistance when you want to get your business up and running again after a disaster.
Commercial Auto Insurance
Your pest control vehicle is used primarily for business, which means it should be covered by a commercial auto insurance policy. The policy requirements vary by state, but all commercial auto policies are designed to protect your vehicle and those who are driving it, whether it be you or an employee. If the vehicle is involved in an accident, the policy will pay for medical care for the injured as well as property damage to the vehicle or damage to other property caused by your truck.
TYPES OF COVERAGE SOME PEST CONTROL COMPANIES MAY NEED
In addition to the policies outlined above, there are a few other types of coverage your pest control 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 you need workers’ compensation insurance. The workers’ compensation insurance you carry will pay for the medical care of workers who are injured while performing the duties required by their jobs. The insurance will also pay for lost wages when an employee is unable to work for a period of time due to a work-related injury. Whether the employee suffers pesticide poisoning, slips and falls while treating a home, or suffers any other work-related injury, your policy has you covered.
Commercial Umbrella Insurance
Sometimes the expense of paying for property damage, medical care, or a lost lawsuit exceeds the policy limits of your general liability insurance policy. When this happens, you are left holding the bill unless you have commercial umbrella insurance. Umbrella policies pick up where your general liability insurance policy leaves off.
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.