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 SURVIVAL SCHOOL BUSINESS
Example 1: During one of the indoor classes, a student trips and falls. If the injured third-party decides to sue your business for their medical expenses, the general liability policy can help cover those costs and provide legal representation.
Example 2: While rearranging the furniture in your rented commercial space, you put deep grooves across the floor and damage several sections of the walls. The landlord is suing you for $20,000 for repairs. General liability insurance would help cover your legal fees and court-awarded damages.
Example 3: The survival school in a neighboring town has named your business in a lawsuit. They are claiming your new advertising campaign implies they are not a reputable company, causing business to drop significantly. A general liability policy would cover your attorney’s fees and any damages awarded by the 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
On average, survivial schools in America spend between $350 - $650 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.
Other Types of Coverage survival schools 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 survival schools should obtain:
Commercial Property Insurance
Commercial property insurance covers the cost to repair or replace business assets after an unexpected loss due to a covered event such as a natural disaster, fire, or theft. The policy can be tailored to meet the organization’s needs, including coverage for owned real estate and business-owned property kept onsite.
Inland Marine Insurance
Teaching survival skills requires getting out of the classroom and into the outdoors. Business-owned tools and equipment taken off-site have limited coverage under a commercial property insurance policy, leaving many owners grossly underinsured. Your insurance agent can assist you in determining if an inland marine policy is necessary to fill any coverage gaps.
Commercial Auto Insurance
Vehicles used for business purposes are specifically excluded on personal auto policies. If you use your vehicle for business purposes, you must obtain commercial auto insurance to fill any gaps in coverage. This policy covers the cost to repair or replace third-party property, the company’s damaged vehicle, and any equipment damaged in an accident. Purchasing the state-mandated minimum coverage leaves many entrepreneurs underinsured. Therefore, we encourage you to discuss policy coverages at length with your insurance professional
Types of Coverage Some survival schools May Need
In addition to the policies outlined above, there are a few other types of coverage your survival school 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
State law mandates that all full-time and part-time employees be covered under a workers’ compensation policy. This policy pays medical bills stemming from an on-the-job injury or illness and a percentage of the employee’s lost wages while the injured party is unable to work. For accidents that result in lawsuits, it also ensures the business owner is properly defended in court and pays awarded damages.
Professional Liability Insurance
Your students hire you to educate, guide, and support them as they learn new survival skills. If a customer feels they have been harmed or wronged because you failed to deliver what was promised, they have the right to sue you for damages. Professional liability insurance, also known as Errors and Omissions (E & O) insurance, covers associated legal costs and third-party damages.
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.