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 PET GROOMING BUSINESS
Example 1: During a shampoo session, a dog in your storefront becomes scared and attacks a customer who is paying by the front desk. In the event of significant injury to the customer, general liability insurance would probably help to cover damages owed by your business or any settlement reached.
Example 2: A distracted employee tries to help multiple customers at once. She neglects one of the dogs in her care, and the dog wanders into the back of the store where it consumes chemical cleaner for the floor. The dog is badly poisoned by the cleaning agent. In the event your grooming business is found liable for this accident, general liability insurance would likely help to cover anything you owed.
Example 3: An expensive cat is frightened during its bathing process and escapes your building. It is hit by a car and badly injured. If liable, your business would probably be covered by general liability insurance for settlements reached or damages owed.
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 pet grooming business in America spends between $300-$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 PET GROOMERS 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 pet groomers should obtain:
Professional Liability Insurance
This policy is helpful for any business in the habit of performing tricky services that could result in significant mistakes or severe client dissatisfaction. A pet-grooming business might find itself in a situation where, for example, its failure to completely rid an animal of lice or fleas causes the pet’s home to become infested. Professional liability insurance keeps businesses covered for any damages or costs incurred through negligence or omissions while undertaking their promised services.
Commercial Property Insurance
A pet grooming business owns plenty of cleaning equipment, products, and other commercial supplies that need to be kept safe and maintained. If these items are destroyed, not to mention the premises on which your business operates, it can mean serious financial trouble. Commercial property insurance helps to cover your business property including equipment, inventory, and owned real estate. Keep your business safe from fires, violent weather, and similar threats with a property policy.
TYPES OF COVERAGE SOME PET GROOMERS MAY NEED
In addition to the policies outlined above, there are a few other types of coverage your pet grooming business 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.
Home-Based Business Insurance
If you run your pet-grooming business from home, this policy will be an important addition to your other coverage. Home insurance often doesn't cover business-related issues that occur in the home. With this policy, you're helping to cover accidents that take place in your home during business hours and ones related directly to your business. This can be acquired as part of a business owner’s policy or as a rider extension to the existing homeowner's policy.
Product Liability Insurance
If your pet-grooming business provides products for sale in addition to its performed services, you may want to look into a product liability policy. This policy will cover damages and injuries caused by products that your business sells. For your grooming business, this may include shampoos, brushes, and other pet supplies. Keep your business covered in the event of product misuse, abuse, and other negative unintended consequences with a product liability insurance 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.