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 SCREENWRITING BUSINESS
Example 1: A client is visiting you to discuss an upcoming script you are going to write. On her way into the restroom, she slips on wet flooring and breaks her arm. She sues your company. Your general liability insurance policy will pay for your legal defense costs, including hiring a lawyer.
Example 2: A competing screenwriting business has filed a lawsuit against your business for libel. The general liability insurance policy you have will cover legal defense costs against libel accusations. It will pay for your attorney and for a settlement if necessary.
Example 3: You are at the place of business of a client to talk about the script you wrote when you trip and fall into his large television, smashing it. Your general liability insurance policy covers damage to customer property. You can file a claim to get money to replace the television.
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, screenwriting 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.
How much will the right insurance cost you?
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Other Types Of Coverage Screenwriting 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 screenwriting businesses should obtain:
Professional Liability Insurance
If a client sues you for making a mistake or failing to perform your professional screenwriting duties, you will need to hire an attorney to defend your business. Professional liability insurance will cover your legal fees in such situations. It will pay for your attorney and for a settlement if needed.
Product Liability Insurance
You want your products—the screenplays you write—to satisfy your clients. But there is always a chance that they could decide that your product caused them injury and sue your business. Product liability insurance will pay for your legal defense costs if you get sued in such a manner, including paying for your attorney.
Types Of Coverage Some Screenwriting Businesses May Need
In addition to the policies outlined above, there are a few other types of coverage your screenwriting 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.
Workers’ Compensation Insurance
If you have employees in your business, you are likely required by state law to have workers’ comp coverage. Your policy will pay for your employees to get medical care if they get injured performing job-related duties. It will also help pay for their lost wages while they are away from work.
Commercial Umbrella Insurance
Your general liability insurance policy will cover you in most general liability situations, but it is possible that you'll exceed your policy limits to—like if you lose a costly lawsuit. An umbrella policy will start paying when the general liability insurance policy stops. It will help you avoid needing to pay 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) or corporation to protect your personal assets. (Visit our step-by-step guides to learn how to form an LLC or corporation in your state.)
- Stay up to date with business licensing.
- 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.