Business Insurance for Solar Panel Stores

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Business insurance is designed to protect a business owner’s financial assets and is an essential investment for a solar panel store.

 

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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 SOLAR PANEL STORE

Example 1: A customer slips on a showroom floor shortly after it’s mopped, falling and hitting their head hard. They require stitches and must be evaluated for a potential concussion. General liability insurance would probably cover the medical expenses.

Example 2: While delivering panels to your solar store’s warehouse, a vendor trips on the stairs and sustains multiple injuries. General liability insurance would likely cover the injuries.

Example 3: A marketer makes some questionable claims about your store’s solar panels, and customers notice they aren’t getting the performance that was promised. Several customers gather together and file a class-action lawsuit. General liability insurance would likely cover the suit’s legal costs and any settlement.

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

The average solar panel store in America spends between $350-$900 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:

Graph showing average price of general liability insurance prices per industry

Several factors will determine the price of your policy. These include your:

  • Location
  • Deductible
  • 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 SOLAR PANEL STORES 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 solar panel stores should obtain:

Commercial Property Insurance

Any warehouses and/or showrooms that your solar panel store owns might need property insurance. This coverage is widely used to insure commercial buildings as well as some of the equipment that’s regularly kept in them. Policies may also be available for outdoor yards that your business has.

Property insurance usually comes as part of a business owner’s policy (BOP).

Workers' Compensation Insurance

If your solar panel store employs workers, there’s a good chance you need workers’ compensation insurance. This insurance protects against job-related injuries and is required by many states.

When purchasing workers’ compensation insurance, make sure your employees are properly classified according to their respective roles. Anyone who works on panel installations should be categorized appropriately, as should any salespeople who don’t go to installation sites. Correct classifications ensure that all your employees are properly covered and that your business pays the right premium for a workers compensation policy.

Product Liability Insurance

Product liability insurance protects businesses from certain liability lawsuits that customers may file if a malfunctioning product causes property damage or injury. It may be purchased by wholesalers, distributors, retailers, or other companies that sell products at some level.

This is especially important coverage for solar panel stores because there are several ways that panels could cause damage or injury. For example, a panel could fall off a roof and strike someone if its mounting failed. Alternatively, an electrical issue could lead to a fire. Even if your store wasn’t ultimately responsible for such an incident, merely defending the business in court would be expensive if you didn’t have insurance to cover the legal fees.

Product liability insurance can often be added to a BOP.

TYPES OF COVERAGE SOME SOLAR PANEL STORES MAY NEED

In addition to the policies outlined above, there are a few other types of coverage your solar panel store 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 Umbrella Insurance

Liability lawsuits can be expensive, and they sometimes exceed primary insurance policies’ limits. Commercial umbrella insurance gives you a way to purchase supplemental liability protection that adds to the limits of your qualified underlying policies.

Commercial umbrella insurance can often be added to a BOP.

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.