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.
COMMON SITUATIONS THAT GENERAL LIABILITY INSURANCE WOULD COVER FOR A SANDBLASTING BUSINESS
Example 1: A client is walking into your office from the parking lot when he trips over some loose pavement and breaks his ankle. He decides to sue your business. Your general liability insurance policy will cover your legal defense costs, including the cost of hiring a lawyer and of paying any required settlement.
Example 2: One of your employees is demonstrating the sandblasting process to an investor when he knocks her to the ground. She breaks her wrist and asks that your company pay for her medical treatment. Your general liability insurance policy will likely cover the cost of treatment if you file a claim with your insurer.
Example 3: A competing sandblasting business has filed a lawsuit against your business for libel. You do not believe that you have libeled them, but you do know that you need a lawyer right away. The general liability insurance policy you have covers legal fees for defending your business against libel claims. It will pay for your lawyer and if you need to settle the lawsuit, it will pay for the settlement as well.
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, sandblasting businesses in America spend 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 sandblasting 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 sandblasting businesses should obtain:
Workers’ Compensation Insurance
As an employer, you are likely required by state law to carry workers’ compensation coverage. Your coverage will ensure that your employees can get medical treatment for work-related injuries. If they get hurt on the job, they can rely on the policy to pay for their medical care. If they cannot work for a time due to their injuries, the policy will help to cover their lost wages.
Commercial Property Insurance
You have invested a significant amount of capital in your sandblasting business. You have purchased equipment, tools, supplies, and real estate to establish your company. If you were to lose most or all your property in an unexpected event like a fire, it would be difficult to get replacements so you could get back to doing business. But if you have a commercial property policy, you can file a claim with your insurer to get the money you need for purchasing new property.
Types of Coverage Some sandblasting businesses May Need
In addition to the policies outlined above, there are a few other types of coverage your sandblasting 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.
Professional Liability Insurance
You are careful to sandblast to the exact specifications your clients' request. Yet, there is always the possibility that you could make a mistake—or face accusations of making a mistake—and have a customer sue you over that mistake. You can tailor a professional liability insurance policy for your business to ensure you have coverage if someone sues you. Your policy will pay for your legal defense costs in such a situation.
Commercial Umbrella Insurance
A commercial umbrella insurance policy can be useful if you exceed the limits of your general liability insurance policy. While it does not happen often, certain circumstances can lead to significant damages—like if you lose a big lawsuit. An umbrella policy will kick in when the general liability insurance policy stops paying. It will help you avoid needing to pay the damages out of pocket.
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.