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 TENNIS SHOP
Example 1: You fail to lock the shop up properly at the end of the evening and a thief steals your clients’ personal property left in your possession. Your general liability insurance would cover the cost to replace their equipment.
Example 2: You post a negative tweet about one of your competitors. They have named your business in a lawsuit, claiming their business has suffered as a result. General liability insurance would cover your legal fees and any damages awarded by the court in a defamation lawsuit.
Example 3: A customer’s child trips over a display while running around the shop. The parents have named your business in a lawsuit, where they are seeking repayment for medical bills. General liability insurance would cover this claim.
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, tennis shops in America spend between $400 - $1,100 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.
How much will the right insurance cost you?
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Other Types Of Coverage Tennis Shops 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 tennis shops should obtain:
Commercial Property Insurance
As a shop owner, you have invested heavily in your physical location, business property, and merchandise. A commercial property insurance policy protects those investments, paying claims stemming from a covered loss. When a loss such as fire or theft occurs, this insurance will pay the cost to repair and/or replace business-owned property. Owners should work with their agent to determine appropriate coverages and limits, considering the cost to replace everything, should a total loss occur.
Professional Liability Insurance
If your shop offers advice or lessons as part of its services, you may want to consider purchasing a professional liability insurance policy. If a customer files a lawsuit against the shop, claiming they were harmed due to your professional negligence, they may take you to court for damages. This policy, also known as Errors and Omissions (E & O) insurance, would cover the cost of attorney’s fees, as well as court-awarded damages, up to the limits of the policy.
Workers’ Compensation Insurance
Workers’ compensation is a state-mandated coverage, required for all businesses with full and/or part-time employees. If an employee is injured while on the job, it covers their medical bills and a portion of their lost wages. If your business is named in a lawsuit as a result of this claim, the policy would also cover your legal expenses as the business owner.
Types Of Coverage Some Tennis Shops May Need
In addition to the policies outlined above, there are a few other types of coverage your tennis shop 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
The state mandates that a commercial auto policy is in place for all automobiles driven for business purposes. If you or a member of your team are involved in an auto accident, this policy will cover the cost to replace/repair damaged property and pay for third-party claims and lost equipment. Since many auto accidents result in significant damage, it is recommended that you discuss your need for limits higher than the state-mandated minimum requirement.
Business Interruption insurance
If you face a significant property loss, your business could be out of commission for months. With no income coming in, enterprises without business interruption insurance could be forced to close their doors forever. This policy, also known as business income and extra expense insurance, will help cover the cost to move to a temporary location, provide coverage for associated extra expenses, and help supplement lost income during the recovery time.
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.