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.

Learn more about the risks covered by general liability insurance.


Example 1: An event planner is interested in sampling your specialty pies to feature them at her next conference. While turning a corner into the backroom, she slips and breaks her wrist in a fall. She asks that your company pay for her emergency transport and medical care. You choose to file a claim with your insurance provider. Your general liability policy will likely cover her medical costs and any other related damages.

Example 2: A local competitor claims that your business libeled them in your latest marketing campaign. While you’re unfamiliar with current libel laws, you understand that you’ll need a strong legal defense to protect your pie shop. Your general liability insurance will likely pay for your legal defense fees in the event you are accused of libel, as well as any settlement awarded in a lawsuit.

Example 3: A customer is taking home a large pie order when he trips over a bit of broken concrete by your front entrance. He sprains his ankle and fractures his wrist in the fall. At the hospital, he decides to sue you for medical costs. Your general liability policy should help to cover the cost of an attorney and legal fees, as well as his medical expenses and other damages.

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

On average, pie shops in America spend between $500 - $1,200 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:

Graph showing average price of general liability insurance prices per industry

Several factors will determine the price of your policy. These include your:

  • Location
  • Deductible
  • 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 Pie Shops 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 pie shops should obtain:

Commercial Property Insurance

You have invested a great deal of time and money into building your pie shop and acquiring specialized equipment for your business. If your equipment and commercial property are lost in a fire or other disaster, they would be very costly to replace. Luckily, if a covered event caused these damages, your commercial property policy will provide funds to repair your equipment and allow you to get back to business as soon as possible.

Product Liability Insurance

Product liability insurance is specifically designed to protect your business and the products you sell. If you are sued by a customer that claims your products made them ill or caused them harm, product liability insurance will pay for your legal costs and the cost of a potential settlement. This coverage is particularly important for food service businesses.

Workers' Compensation Insurance

If you have employees, it’s likely that your state requires you to carry workers' compensation coverage. This essential policy is designed to help pay for medical treatment if your employees are injured on the job. Additionally, workers' compensation can provide lost wages for your employees until they can return to work.

Types Of Coverage Some Pie Shops May Need

In addition to the policies outlined above, there are a few other types of coverage your pie shop 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.

Data Breach Insurance

If your business allows customers to place pie orders online, data breach insurance will help you pay for costs associated with a hack or a data breach. This insurance can help protect both your business and your customers in case of financial theft of fraud.

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.