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 employee mops up a spill on the floor of your store but neglects to place a sign to indicate a slippery surface. A customer slips and falls, breaking her tailbone. She sues your business for medical payments and ongoing discomfort. If found liable, your business would probably be covered for payments or settlements through general liability insurance.

Example 2: A toddler is placed in the child seat of his mother’s shopping cart, but there is no seatbelt in this particular cart. The child squirms out and tips over the edge of the cart while his mother is not looking. He falls nearly four feet, landing on his head and sustaining a skull fracture. If held liable by a court, general liability insurance could probably help to cover any resulting settlement or payments for medical damages.

Example 3: A teacher from the local elementary school likes to drop by your storefront and chat as he picks up supplies for his next classroom project. Lately, he has developed a serious cough, becoming very ill and unable to work. An employee complains of comparable symptoms, and it is discovered that there is asbestos in the ceiling. If found liable, general liability insurance could probably assist in covering a settlement reached with the teacher or any medical payments mandated by the court.

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 school supply store in America spends between $350-$600 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 School Supply Stores 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 school supply stores should obtain:

Product Liability Insurance

School supply stores must exercise caution in the products they sell. Children represent vulnerable, developing minds, so if a product contains harmful materials or features dangerously sharp edges, a parent may elect to sue your business for a sizeable sum. Sometimes kids can break open a seemingly safe, child-friendly object, locating dangerous wiring or other hazards. If any of your products are considered as having injured a customer or their child, product liability insurance helps to cover any damages your company owes.

Commercial Property Insurance

Most businesses can benefit from a policy like this, and school supply stores are no exception. Events like fire and violent weather can leave your school supply storefronts at a major loss if the inventory is damaged. This policy can help to protect your business from disasters by covering losses of inventory, equipment, and owned commercial real estate.

Types Of Coverage Some School Supply Stores May Need

In addition to the policies outlined above, there are a few other types of coverage your school supply store 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

Any business that has part-time or full-time employees is legally required to provide some kind of compensation policy. This insurance covers your workers in the event of workplace accidents resulting in serious injury. Employees and their families can rest easier with this insurance in place, as it covers disability and/or death benefits for all workplace incidents. Keep your business running and your employees comfortable with a workers’ compensation policy.

Business Interruption Insurance

Following a disaster, your business may be forced to close for a period of time in order to make repairs and/or find a temporary location to operate out of. Business interruptions of this nature are often rife with recovery expenditures that can leave companies in a bad spot even after they manage to set themselves up again.

Business interruption insurance is designed to address exactly this issue. Addressing disasters like fire and tornadoes, an interruption policy will cover estimated profit losses and sometimes even temporary relocation costs, allowing a business to continue through its own period of recovery.

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.