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 SURVEY BUSINESS
Example 1: A potential new client comes to your office to discuss an upcoming project. While there, he trips over a computer cord and injures himself. Your company is being named in a lawsuit, asking for payment for damages and pain and suffering. Your general liability insurance would cover your legal costs and any damages paid out in the suit.
Example 2: While on the job, your employee accidentally drops a piece of equipment in the road. Someone runs over the equipment, causing major damage to their vehicle. Your general liability policy would cover the repairs to their vehicle and any personal injuries stemming from the accident.
Example 3: Your new brochures include a photo that is protected under copyright law. The photo owner is suing for copyright infringement. General liability insurance will help pay litigation expenses and any judgments against you, up to the limits of the policy.
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.
On average, survey businesses in America spend between $400 - $700 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.
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 survey businesses should obtain:
Professional Liability Insurance
If a customer feels they have been harmed in any way as a result of your actions or services, they can sue the company for damages. Professional liability insurance will cover negligence claims, whether it be due to a mistake or failure to perform.
Commercial Auto Insurance
Your work requires ownership and operation of a fleet of vehicles. Because a personal auto policy does not apply in this instance, a commercial auto policy is necessary. In the event of an accident, the policy would cover the cost to repair your vehicle, as well as any liability claims that may arise.
While the state mandates the minimum amount of coverage required, this is often not enough to cover a major accident. Therefore, business owners are encouraged to consider professional and personal assets and purchase limits that ensure no coverage gaps.
In addition to the policies outlined above, there are a few other types of coverage your survey 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.
Commercial Property Insurance
If your business-owned building is damaged, repairs could become quite costly. A commercial property insurance policy pays to repair or replace damaged property, as well as the contents stored on-site. Business owners should discuss their needs with an insurance professional, as coverage may not apply to equipment damaged or stolen off-site, without the proper endorsement.
This coverage can be purchased as part of a part of a business owner’s policy (BOP).
Workers Compensation Insurance
This coverage, required by every state in the United States, offers payment for medical bills when an injury occurs while on the job. Additionally, the policy covers your employees’ lost wages, and assists with fees associated with a related lawsuit.
Workers compensation is typically purchased as a standalone policy.
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.
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.