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 SITTER
Example 1: You are meeting a client at her home to discuss taking care of her two dogs. As you are walking from her living room to the bathroom, you stumble and knock over her new 75-inch flat screen television. Your general liability insurance policy will likely help you pay for replacing the television.
Example 2: A client is bringing his dog to your place of business. He is trying to hold the door open to pull his dog through when it snaps back shut on his hand. The impact breaks several of his fingers and he sues your business. The general liability insurance policy you have will cover the costs of your legal fees, including paying a settlement if it is necessary.
Example 3: A competing pet sitting business has determined that your marketing materials are unfairly critical of their business and sue you for libel. The general liability insurance policy you carry will pay for your legal defense. It will also pay for settling out of court if it is in your best interest to do so.
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 sitter 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.
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OTHER TYPES OF COVERAGE PET SITTERS 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 sitters should obtain:
Professional Liability Insurance
No matter how diligent you are about doing your job right and taking great care of your clients’ pets, you are still at risk of a lawsuit. If one of your clients does decide to sue you based on your professional work—like if they determine that you injured one of their pets—then a professional liability insurance policy designed for your business will cover your legal defense costs.
Commercial Auto Insurance
Any automobile you use primarily for business, such as for picking up, delivering, and walking dogs should be covered by a commercial auto insurance policy. It will ensure that you meet your legal obligations for commercial auto insurance. It will also help pay for vehicle damage and medical treatment in the event of an accident.
TYPES OF COVERAGE SOME PET SITTERS MAY NEED
In addition to the policies outlined above, there are a few other types of coverage your pet sitter 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 hire employees to help with your pet sitting business, your state most likely will require you to carry workers’ compensation insurance. Workers’ comp will cover the cost of medical treatment for employees’ work-related injuries as well as help pay for lost wages while they recover from their injuries.
Home-Based Business Insurance
If you run your pet sitting business out of your home, it is a good idea to have home-based business insurance. Your homeowner’s policy may not cover accidents resulting from business activities. You can get home-based business insurance as part of a business owner’s policy or possibly have it added to your homeowner’s 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.