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 TIMESHARE EXIT BUSINESS
Example 1: To gain further exposure, you have signed up to showcase your services at a local convention. The convention requires $1 million of liability insurance for all participants. A general liability policy would help fulfill that requirement.
Example 2: Your new website and marketing materials feature a photo that is protected under copyright law. The photo’s owner is suing your business for copyright infringement. General liability insurance would help cover legal representation and third-party damages, up to the limits of the policy.
Example 3: While visiting your office, a potential customer trips over an extension cord and sprains her ankle. She is asking for reimbursement for her medical bills, which your general liability policy would cover.
Example 4: While breaking down a display at a local convention, your employee causes a huge gash in the flooring. The convention center is suing your company to replace the damaged flooring. General liability insurance would cover the cost of these repairs.
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, timeshare exit 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 time share exit businesses should obtain:
Professional Liability Insurance
If a client feels they are harmed as a result of your professional advice and services, they could sue you for damages. Professional liability insurance, also known as Errors and Omissions (E & O) insurance, provides coverage for legal costs and court-awarded damages for lawsuits stemming from your work. Potential covered losses include failure to deliver promised services, oversights and mistakes, and professional negligence.
Home-based business insurance
If your business is operated out of your home, business property and business-related losses are likely excluded under your homeowner's policy. To ensure proper coverage, a home-based business insurance policy may be necessary to cover your business materials in the event of a loss.
In addition to the policies outlined above, there are a few other types of coverage your time share exit 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
Business owners who operate outside of the home should consider a commercial property policy. This covers the costs to repair or replace business property and owned real estate, should a covered loss occur.
Workers’ Compensation Insurance
Once your time share exit business has grown enough that hiring employees is necessary, you will need to purchase a workers’ compensation policy. This state-mandated insurance offers coverage for medical bills and lost wages, should an employee become ill or injured while on the job. This policy also covers the costs of legal representation if you are named in a lawsuit by an injured employee.
Commercial Umbrella Liability Insurance
Entrepreneurs with high liability risks or extensive financial assets should consider purchasing a commercial umbrella policy. While general liability insurance is one of the first lines of defense in a major lawsuit, it is written with a policy limit. Once this coverage is exhausted, you could be held responsible financially for the remainder of expenses. A commercial umbrella policy offers an added layer of protection, picking up where a general liability policy leaves off.
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.