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 SUMMER CAMP
Example 1: A visiting parent slips on the pool deck and needs stitches on his forehead. General liability insurance would cover the parent’s trip to the emergency room and any resulting medical bills.
Example 2: On a canoe trip, one of your counselors drops a cooler in a rented canoe and dents the bottom. The canoe company asks you to replace the damaged canoe. A general liability policy would cover the canoe repair or replacement costs.
Example 3: During a small fireworks display on the last night of camp, a falling flame burns a local homeowner as they walk by the property. General liability insurance would cover damage to the homeowner’s clothing and any medical bills resulting from the incident.
Example 4: You need a loan to add a horse stable for next year’s camp, but the bank requires liability insurance as part of their terms. Having a general liability policy would help ensure your eligibility for the loan.
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, summer camps in America spend between $300 - $800 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.
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Other Types of Coverage summer camps 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 summer camps should obtain:
Commercial Property Insurance
If your camp owns the buildings in which it operates, you need commercial property insurance to cover the buildings and business property stored there in the event of a fire, burglary, or natural disaster. Be sure to carefully consider any build-outs and renovations to your buildings—as well as replacement costs for your business property—when securing coverage.
You can typically purchase this coverage as part of a business owner’s policy (BOP).
Workers’ Compensation Insurance
Most states require businesses to carry workers’ compensation insurance for their part-time and full-time employees. This coverage protects your employees if they become injured at work or fall ill after a work-related accident. It not only covers an employee’s medical bills and lost wages if they need time to recover but also any disability benefits stemming from a work-related accident. While your state may allow exemptions for business owners, consider including yourself in your workers’ compensation policy if you engage in the daily operation of the business.
You can typically purchase workers’ compensation insurance as a standalone policy.
Types of Coverage Some summer camps May Need
In addition to the policies outlined above, there are a few other types of coverage your summer camp 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
If your camp owns a van to transport campers or to conduct other business, state law requires you to carry at least state-mandated minimum levels of commercial auto insurance. Since the minimum requirement only offers basic protection, consider purchasing limits greater than those required by state law.
You can typically purchase commercial auto insurance as part of a business owners’ policy (BOP).
Commercial Umbrella Insurance
Summer camps often face sizable risks and, while your general liability policy covers most claims, some accidents or lawsuits may be so catastrophic that they threaten to exhaust the limits of your primary coverage. Commercial umbrella insurance protects you from paying out-of-pocket for any legal fees and awarded damages that exceed your primary policy.
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.