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 SAUNA INSTALLATION BUSINESS
Example 1: Your employee is bringing some tools into a client's yard for an installation job when he runs into the client. He knocks her to the ground and she breaks her arm. She decides to sue your company for damages. Your general liability insurance policy will pay for your legal defense costs, including hiring a lawyer.
Example 2: A competing sauna installation business has sued your company for libel. You do not believe that there is any validity to their accusations, but you also understand that you need an attorney to protect your interests. The general liability insurance policy you have will cover legal defense costs against libel accusations.
Example 3: A client is visiting your place of business to discuss sauna installation options. On his way into the restroom, he slips on wet tiling and breaks his tailbone. He asks that you pay for his medical treatment. Your general liability insurance policy will likely pay for the treatment if you file a claim.
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, sauna installation 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 sauna installation 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 sauna installation businesses should obtain:
Professional Liability Insurance
You are serious about your installation work and strive to do a good job every time. However, even with your best effort, there is still a chance that a client could sue you for a mistake you made—or they think you made. Professional liability insurance will pay for your legal defense costs in such a situation. It will pay for your attorney and for a settlement if you need to settle the lawsuit.
Workers’ Compensation Insurance
You need your employees in good health to help you install saunas for your clients. If they get injured, you want to know that they can get the medical care they need for a fast recovery. Workers’ compensation insurance will pay for the treatment of work-related injuries. It will also help cover lost wages for employees who cannot work while injured. Your state likely requires you to have workers’ comp coverage if you have employees.
Types of Coverage Some sauna installation businesses May Need
In addition to the policies outlined above, there are a few other types of coverage your sauna installation 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.
Commercial Auto Insurance
You should cover the vehicle you use for your installation work with a commercial auto policy. Your policy will pay for repairs or replacement of your vehicle if you are in an accident. It will also pay for medical treatment for the occupants of the vehicle who get injured. If you or your employees are responsible for the accident, the policy will also pay for repairs for the other vehicle and medical care for its occupants.
Commercial Umbrella Insurance
You have a general liability insurance policy to protect your business from most general liabilities. You can also get an umbrella policy to add another layer of protection. If you exceed the limits of your general liability insurance policy—like if you lose a big lawsuit—the umbrella policy will kick in and start paying the remaining damages.
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.