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.
COMMON SITUATIONS THAT GENERAL LIABILITY INSURANCE WOULD COVER FOR SUNGLASSES STORES
Example 1: Your business is one of two sunglasses companies with stands in the local mall. One of your employees has been telling customers that the other sunglasses stand sells overpriced knock-offs. The other company finds out and takes your business to court for slander. General liability insurance would probably assist in covering any court payments or settlements based on the other company’s claim.
Example 2: A customer has to remove his prescription lenses before trying on your sunglasses, but as he is doing so, he trips over an object on the ground. He lands hard and breaks his wrist. General liability insurance would likely cover any resulting settlements or payments for which a court finds you liable.
Example 3: To improve community awareness, you advertise a fun tour through one of your manufacturing facilities, allowing visitors to watch sunglasses in the making and learn about general eye care. A child wanders off from one of the tour groups and injures her hand in some of the manufacturing machinery. General liability insurance could help cover your business in the event it must reach a settlement or is found liable by a court.
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 sunglasses company in America spends between $350 - $750 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 SUNGLASSES 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 sunglasses stores should obtain:
Product Liability Insurance
Your business will be selling sunglasses designed not only to protect the eyes but enhance vision in the bright sun. If a customer attributes some injury or costly accident to being visually impaired by your sunglasses, product liability insurance can cover resulting damages for which a court finds you liable. Any damage attributed to your business’s sunglasses brand will be covered by this policy, and it can be custom-fit to your individual business model and product line.
Commercial Property Insurance
Storefronts or stands containing your sunglasses products, as well as any manufacturing facilities you may own, are central assets to your company. Commercial property insurance covers damages to owned real estate, tools, equipment, or products, including damage or destruction resulting from fire or violent weather. A policy covering your commercial property will assist in protecting the valuable products on which your business relies for revenue.
TYPES OF COVERAGE SOME SUNGLASSES STORES MAY NEED
In addition to the policies outlined above, there are a few other types of coverage your sunglasses 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.
Workers’ Compensation Insurance
Any expanding business will want to undertake the search for employees, whether due to an increase in customers or the opening of new locations. All businesses employing workers part-time or full-time require a workers’ compensation policy to protect their valuable staff from on-site injuries and to cover any resulting disability or death benefits. No matter how safe your employees may seem in the workplace, accidents happen—that’s why insurance exists.
This policy is especially important for sunglasses companies that specialize in expensive brand-name frames. Employee dishonesty can result in the loss of easy-to-conceal company products worth enviable sums of money. Over time, a dishonest employee can sometimes find ways to plausibly cover up his or her consistent theft of inventory manufactured by high-profile fashion companies like Gucci or Prada.
Combine this with the possibility of cash theft from registers or safes in the back, and your business can take quite a hit before you realize it. Crime insurance protects your business from suffering serious losses due to criminal activity including theft, forgeries, digital fraud, and more.
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.