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 SKATEBOARDING LESSONS BUSINESS
Example 1: While teaching a lesson, you stumble and knock over the parent of your student. She breaks her arm in the fall and sues your business. Your general liability insurance policy will pay for your legal defense costs. It will pay for your attorney and for a settlement if necessary.
Example 2: A competing business has sued your company for libel. You know you need a lawyer to defend your interests. Your general liability insurance policy will pay for your lawyer if someone sues you for libel.
Example 3: Your employee steps on the bag of a client and breaks the expensive camera equipment inside. The general liability insurance policy you have will cover damage to customer property. You can file a claim and get help replacing the equipment.
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, skateboarding lessons 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.
Other Types of Coverage skateboarding lessons 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 skateboarding lessons businesses should obtain:
Professional Liability Insurance
You do your best to teach your students well. But, even with your hard work, there is always a chance you'll make mistakes and face lawsuits for them. Professional liability insurance will pay your legal defense costs in such circumstances. It will cover the cost of your attorney and a settlement if necessary.
Commercial Property Insurance
The various skateboarding equipment, supplies, computers, software, furnishings, and other items you invested in to establish your business were costly. It would be difficult to replace them if they get lost in an unexpected event like a fire. Commercial property insurance can help with those replacements. You can file a claim and get money to help you get new property lost in a covered event.
Types of Coverage Some skateboarding lessons businesses May Need
In addition to the policies outlined above, there are a few other types of coverage your skateboarding lessons 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 hired employees to help with your skateboarding instruction business, chances are state law requires you to have workers’ compensation insurance. A policy will pay for your employees to get medical treatment if they get injured doing their jobs. It will also help cover their lost wages while they are away from work.
Commercial Umbrella Insurance
An umbrella policy picks up where a general liability insurance policy leaves off. It will start paying when you exceed the limits of your general liability insurance policy—which can happen if you lose a big lawsuit.
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.