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 SUPPLEMENT BUSINESS

Example 1:  After a meeting at your place of business, a client slips on the icy pavement in your parking lot. She sustains a concussion and a fractured wrist in the fall. General liability insurance would cover the injured client’s medical bills.

Example 2:  A customer falls ill after consuming product from a bad batch of one of your vitamins and sues your business. General liability insurance would pay for your legal defense, the customer’s medical bills, and any other court-awarded damages.

Example 3:  During a meeting at a potential new client’s shop, you move some paperwork to make room to sit down and then that paperwork gets hot and starts a fire. General liability insurance would cover the cost of repairing or replacing the potential client’s damaged building and its contents.

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, supplement businesses in America spend 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:

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 Supplement 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 supplement businesses should obtain:

Product Liability Insurance

While you strive to manufacture and sell supplements that satisfy your clients and their customers, there’s always a chance someone might decide your product resulted in an illness or injury. In the event of a lawsuit, product liability insurance would cover your legal fees and any required settlement.

You can typically purchase this coverage as part of a business owners policy (BOP).

Commercial Property Insurance

You made a major investment in the equipment, supplies, and real estate needed to establish your supplement business. In the event of a fire, theft, or severe storm, commercial property insurance would cover the cost of repairing or replacing your business-related property. This includes structural damage to your building and the business materials stored there.

You can typically purchase commercial property insurance as part of a business owners policy (BOP). 

Inland Marine Insurance 

While commercial property insurance covers your business property when it resides on your premises, it does not protect that property once it leaves your facility. Inland marine insurance fills this coverage gap by protecting your business assets while out in the field or en route to a client’s shop. 

Types Of Coverage Some Supplement Businesses May Need

In addition to the policies outlined above, there are a few other types of coverage your supplement 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 any employees, most states will require you to carry workers’ compensation insurance for your part-time and full-time workers. 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 or death benefits stemming from a workplace accident.

Insurers typically offer workers’ compensation insurance as a standalone policy. 

Business Interruption Insurance

If you need to close your business temporarily after a fire, severe storm, or other covered event, it could take weeks, months, or even years to complete the necessary repairs. Business interruption insurance helps cover your expenses and lost revenue until you can reopen. Many policies also offer extra expense coverage, which can help you set up a temporary location while you make repairs to your facility.     

 

You can typically purchase this coverage as part of a business owners policy (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.