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 SELF-DEFENSE TRAINING BUSINESS
Example 1: One of your students slips and falls in the restroom on wet flooring. She breaks her arm and decides to sue your business. Your general liability insurance policy will pay for your legal fees, including the cost of hiring an attorney.
Example 2: Another self-defense training business in your town has sued your business for slander and libel. You do not believe their accusations are true, but you know you need a lawyer. The general liability insurance policy you have will cover your legal costs if someone accuses you of slander and libel.
Example 3: While walking into your studio from the parking lot, a student trips over broken pavement and breaks his wrist. He asks that you pay for his medical treatment. Your general liability insurance policy will likely cover the cost of his 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.
On average, self-defense training businesses in America spend between $350 - $650 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 self-defense training businesses should obtain:
Professional Liability Insurance
You strive to teach your students how to defend themselves in a confrontation. But no matter how good your teaching is, it is possible that you'll make mistakes that cause students to get injured and sue your business. Professional liability insurance will pay for your legal defense costs in such situations.
Commercial Property Insurance
You have invested a lot of money in the training equipment, supplies, and other items you use to run your self-defense training business. If you were to lose your property in an unexpected event like a fire, it would be costly to replace. However, if you have commercial property coverage, you can file a claim with your insurer to get help with replacements.
In addition to the policies outlined above, there are a few other types of coverage your self-defense training 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 at your training studio, chances are that state law requires you to have workers’ comp coverage. If employees get hurt performing job-related duties, the policy will pay for their medical care. It will also help pay their lost wages while they are away from work.
Commercial Umbrella Insurance
An umbrella policy will provide the extra layer of protection you need in the event that you exceed the limits of your general liability insurance policy—which can happen if you lose a big lawsuit. It will start paying when the general liability insurance policy stops so you can avoid needing to pay damages out of pocket.
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.