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 PRESSURE WASHING BUSINESSES
Example 1: To clear the stubborn grime from the grooves in a concrete surface, you use your highest-intensity nozzle. You accidentally drop the hose, and the pressured stream passes over your client’s hand, producing a laceration that requires medical attention. In the event you are found responsible, general liability insurance would probably cover any damages you are asked to pay.
Example 2: Your employee is pressure-washing a client’s expensive modern vehicle, but he underestimates the potency of the water stream. While focusing on the front bumper, he cracks the surface and leaves a very noticeable dent. Due to the car’s specialized modern build, replacement parts and repairs for the damaged section amount to a sizeable claim. If your company is held liable, it is likely that general liability insurance would be able to cover some amount of what you owe.
Example 3: A new employee in your business is using an electric pressure washer to scrub the dirt and grime from a farmer client’s pig crates. Due to an interior electrical fault, an exposed metal surface on the washer becomes energized. It comes into contact with pooling water from the crates and starts a fire, destroying a large chunk of the client’s barn and livestock pens. In a case like this, general liability insurance would assist your company in covering lawsuits or settlements resulting from the accident.
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 pressure washing business in America spends between $500 - $1,500 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 PRESSURE WASHING BUSINESSES 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 pressure washing businesses should obtain:
Commercial Property Insurance
As a business that thrives on its use of complex specialized equipment, commercial property insurance is a must-have. Different washer units and their accessories, like spray nozzles and motor/electrical components, will be expensive to replace or repair. This policy will allow pressure washing businesses to protect some of their most important equipment investments. Fire, storms, explosions, and vandalism are commonly covered in commercial property insurance policies.
Your business will need a storage center for its equipment and vehicles, and this insurance will also cover any owned real estate on which you maintain your important supplies. Fires and destructive weather are examples of what may be covered by your commercial property insurance with regard to real estate.
Commercial Auto Insurance
You’ll need reliable transportation for your pressure washing equipment, and that usually means trucks or vans. For any business that uses vehicles on public roads, commercial auto insurance is required by the state. Your vehicles will be essential assets to company productivity, so skipping auto insurance is out of the question. This policy will cover a variety of damages to vehicles, and potential items for coverage can include standard cars, trucks, or even trailers.
TYPES OF COVERAGE SOME PRESSURE WASHING BUSINESSES MAY NEED
In addition to the policies outlined above, there are a few other types of coverage your pressure washing 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.
Workers’ Compensation Insurance
A pressure washing business may start small, but as it grows, a compensatory policy for employees will become a priority. In some states, part-time or full-time employees will legally require a business to take out a workers’ compensation policy. This covers a range of on-the-job mishaps, including those resulting in medical intervention, disability, or death. High-pressure washing units require careful, professional handling in order to meet safe working standards. Even if you trust your employees, a good compensation policy is ultimately in everyone’s best interests.
A pressure washing business cannot function without its expensive service equipment. It is natural to give your employees easy access to the utility storage locations in which you house washing units, company vehicles, and other valuable items. However, in the event that an employee abuses their company access to steal your equipment, crime insurance is a smart way to recoup the losses incurred as you replace the stolen goods.
This policy may also cover employee dishonesty along the lines of deliberate property damage, theft of securities, or even the direct theft of money by accounting staff or similar office workers.
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.