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 SCREENPRINTING BUSINESS
Example 1: One of your employees is transferring supplies from their vehicle into the inventory room using a metal pushcart. As they stop to prop open the door, they lose control of the cart and it smashes into the luxury vehicle of a customer, causing extensive damage. Your general liability insurance policy will likely cover the cost of repairs and your legal fees if there is a lawsuit.
Example 2: While taking a tour of your production floor, a customer trips over an extension cord and falls into some of the machinery. They suffer serious injuries and threaten to sue. General liability insurance will likely cover the cost of their medical bills. Additionally, your policy will likely pay for your legal fees and any awarded damages or settlements in a lawsuit.
Example 3: A customer has arranged to pick up an order before the shop opens. The customer enters the building while your cleaning crew is still at work and slips on the wet entrance floor. They hit their head in the fall and break their wrist. General liability insurance will likely pay for their medical expenses and any other damages associated with a possible 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.
On average, screenprinting businesses in America spend between $300 - $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:
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.
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 screen printing businesses should obtain:
Workers’ Compensation Insurance
Workers’ compensation insurance is designed to cover your employees in the event of a workplace accident. This coverage is typically required by state law and helps to cover medical bills, disability benefits, and, in severe cases, even death benefits related to workplace injuries.
Product Liability Insurance
If you produce an item that is found to be defective or otherwise causes harm to your customers, you can be held liable for any related damages. With product liability coverage, you can protect your business in the event of a lawsuit and rest easy knowing that legal fees and any awarded settlements will be covered by your insurance policy.
In addition to the policies outlined above, there are a few other types of coverage your screen printing 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
Whether your company has a small fleet of delivery vans or you use your private vehicles for business duties, you should invest in commercial auto insurance. Keep in mind that your personal car insurance policy will not protect you or your employees in the event of a work-related accident on the road.
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.
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.