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 PUMPKIN FARM
Example 1: In addition to pumpkin picking, your farm features a corn maze each fall. One of your visitors become lost in the maze and tries to escape through the cornfield, only to fall into a hole and break their leg. General liability insurance will likely cover the costs of their medical bills and any other damages in a lawsuit.
Example 2: A young child is running through the pumpkin patch and trips over a large vine that hasn’t been cleared from the pathway. They fall and sustain a serious head injury, leading to a lawsuit where you are found liable. General liability insurance will likely cover any damages in the event that you are sued by their family.
Example 3: Your pumpkin farm also sells smaller gourds for cooking during the fall harvest. Customers complain of flu-like symptoms after eating your gourds and it is later determined that the crops tested positive for E. coli. General liability coverage will likely pay for any damages in a resulting lawsuit.
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 pumpkin farm in America spends between $300-$800 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 PUMPKIN FARMS 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 pumpkin farms should obtain:
Commercial Auto Insurance
Any vehicles that are used for business-related purposes on your pumpkin farm must be covered under a commercial auto insurance policy. Personal car insurance will not protect your drivers, your company cars, or a third-party in the event of an accident.
Workers’ Compensation Insurance
If your business employs any part-time or full-time employees, you may be required to carry workers’ compensation coverage by state law. This important insurance policy works to help pay for medical bills in the event that an employee is injured on the job.
TYPES OF COVERAGE SOME PUMPKIN FARMS MAY NEED
In addition to the policies outlined above, there are a few other types of coverage your pumpkin farm 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.
Commercial Property Insurance
Operating a pumpkin farm requires expensive equipment and buildings to store your equipment when it’s not in use. Commercial property insurance helps to protect your business-related buildings and the items inside in the event of a natural disaster, fire, or burglary.
Commercial Umbrella Liability Insurance
If your business is sued, there is a chance that the damages associated with the lawsuit my exhaust the coverage provided by your primary insurance policies. In these cases, commercial umbrella liability insurance works to go above and beyond those limits to protect your business and keep it running.
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.