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 A SWIM SCHOOL
Example 1: A student is walking from the locker room to the pool when she slips, falls, and hits her head. She sustains a concussion and requires medical care. Your general liability insurance will likely pay for her medical treatment.
Example 2: The parents of a potential student are visiting your facility when the father misses a step and falls, twisting his knee and requiring medical care. He decides to file a lawsuit against your business. The general liability insurance policy you carry will pay for your legal fees, including the cost of a settlement if you settle out of court.
Example 3: One of your competitors has accused your business of libel, claiming that you printed false claims against their business in your last advertising campaign. The general liability insurance policy you have will pay for your legal defense in the case of libel accusations. It will also pay for a settlement if necessary.
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 swim school in America spends between $300-$800 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 SWIM 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 swim schools should obtain:
Professional Liability Insurance
As a professional swim instructor, it is important that you have liability insurance tailored to your job. Professional liability insurance is designed around the specific risks you face in your profession. If you are facing a lawsuit from a customer, such as if they claim your lessons were inadequate and caused them harm, your professional liability insurance will cover your legal fees.
Workers’ Compensation Insurance
The swim instructors you hire to help with your business need to be covered by workers’ compensation insurance, both so you can meet state legal mandates and for their own protection. It will pay for treating work-related injuries as well as help cover lost wages due to work-related injuries.
TYPES OF COVERAGE SOME SWIM SCHOOLS MAY NEED
In addition to the policies outlined above, there are a few other types of coverage your swim school 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 Auto Insurance
If you have a vehicle that you use primarily for business, such as traveling to different locations to teach swimming lessons, then you need commercial auto insurance. It will ensure that you meet the legal requirements for commercial vehicles in your state and will provide financial help in the event of an accident—both for property damage and for medical treatment for injuries.
Commercial Umbrella Insurance
An umbrella policy picks up where a general liability policy leaves off. So, if you find yourself in a situation where the limits of your general liability policy are exceeded, such as losing a big lawsuit, your umbrella policy would begin to pay for 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.