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 STORE
Example 1: While shopping, a customer decides to grab an object off a high shelf. The customer accidentally pulls multiple items off the shelf and is hurt when they fall on his head. He wants to sue you for medical costs. General liability insurance should cover those costs.
Example 2: A product sold in your store becomes part of a class action lawsuit because of purported health issues, and your store becomes one of the defendants. Your general liability insurance is designed to pay for legal fees and associated payouts.
Example 3: An employee accidentally recommends three times the dosage of a supplement to a customer. As a result, the customer is hospitalized for three days. They want to sue you for medical costs as well as time missed from work.
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 stores 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:
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 supplement 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 supplement stores should obtain:
Professional Liability Insurance
To gain a loyal customer base, you and your staff must be able to recommend and educate clients regarding the products you carry. Unfortunately, this increases your chances of a liability claim. Professional liability insurance, also known as errors and omissions insurance (E&O), offers coverage should a client sustain injuries or fall ill as a result of the store’s recommendation.
Workers’ Compensation Insurance
Most states require that you purchase workers’ compensation insurance for each employee. This type of policy offers coverage, up to the limits of the policy, for work-related injuries and lost wages. While typically not required, many business owners choose to cover themselves if they work on-site regularly.
Workers’ compensation is generally purchased as a standalone policy.
Product Liability Insurance
Product liability insurance is important for any business that creates and/or sells products to the public. If a customer falls ill or sustains an injury due to a product you carry, you could be named in a lawsuit. This coverage would offer you legal representation and pay out any damages awarded through the suit. Product liability insurance is tailored to the specifics of your business and the products you sell.
Types of Coverage Some supplement stores May Need
In addition to the policies outlined above, there are a few other types of coverage your supplement 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 Property Insurance
If you own the property your supplement store operates out of, it is important that you protect your investment should a covered event occur. In addition to covering the building itself, commercial property insurance will offer a payout for business property that is lost, including store equipment and inventory.
This type of policy is often purchased as part of a business owner’s 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.
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.