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 SCOOTER RENTAL COMPANY
Example 1: An inexperienced rider reverses rather than accelerates forward, crashing before leaving the parking lot. The customer is injured and causes physical damage to a neighboring business’ delivery van. General liability insurance would cover the customer’s medical bills and costs to fix the damage to the delivery van.
Example 2: While visiting your business, a customer trips and inadvertently knocks down a row of scooters. One of the scooters falls onto another customer’s leg. The injured customer must later have surgery due to complications stemming from the accident and is seeking payment for damages. A general liability policy will cover legal representation and any resulting payout.
Example 3: Your marketing representative uses a tagline from a local author’s book. The author names both you and the marketing representative in a lawsuit. General liability insurance would cover the cost of legal representation and the damages ruled by the court, up to the limits of your policy.
Example 4: A potential franchise partner requires evidence of a general liability policy before conducting business with you. Having a policy would help ensure eligibility.
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, scooter rental companies in America spend between $450 - $1,000 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 Scooter Rental Companies 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 scooter rental companies should obtain:
Commercial Property Insurance
If you own the building in which you run your scooter rental business, commercial property insurance is an essential part of your insurance package. This would cover the building as well as business property you keep on-site.
When considering your coverage amount, be sure to include the cost of any renovations you’ve made to the building and the replacement cost of all business property and specialized equipment stored there. Because your customers drive your rental scooters on public roadways, you may also need a separate auto policy for your fleet.
You can typically purchase this coverage as part of a business owner’s policy (BOP).
Workers’ Compensation Insurance
Your team is an essential part of your business’ success, so it’s important to cover them should an injury occur on-premises. Workers’ compensation is the state-mandated insurance that covers employees in the event of a work-related illness or injury. This covers medical bills for an employee’s work-related injuries, offers payment for lost wages, and also provides legal representation should a lawsuit occur.
You must purchase workers’ compensation insurance as a standalone policy.
Types of Coverage Some Scooter Rental Companies May Need
In addition to the policies outlined above, there are a few other types of coverage your scooter rental company 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.
Business Interruption Insurance
Could you keep your business afloat if you were forced to shut down for an extended amount of time? If not, you should consider purchasing business interruption insurance. In addition to replacing a portion of lost revenue, this insurance will help pay the expenses to move to a temporary location and any additional costs incurred because of that move.
You can typically purchase business interruption insurance as part of a business owners’ policy (BOP).
Commercial Umbrella Liability Insurance
While rewarding, the transportation industry faces increased liability risks with claims often exceeding the limits of primary liability policies. Commercial umbrella liability insurance increases liability coverage, protecting your business against sizable covered lawsuits.
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.