Business Insurance for Tour Companies

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Business insurance is designed to protect a business owner's financial assets and is an essential investment for a tour company.

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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 TOUR COMPANY

Example 1:  While using the restroom before a tour, a customer falls and breaks his wrist. General liability insurance would cover the injured customer’s medical expenses.

Example 2:  You are overheard making negative comments about a competitor’s services and have been named in a defamation lawsuit. A general liability policy would cover your legal representation and court-awarded damages.

Example 3:  You are considering expanding to a neighboring town and have applied for a loan. General liability insurance would help fulfill your lender’s liability insurance requirement.

Example 4:  Your business’ new pamphlets contain a picture that is protected under copyright laws and you have been named in a lawsuit for copyright infringement. General liability insurance would cover your legal fees and pay awarded damages up to the limits of your 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.

Cost of General Liability Insurance

On average, tour companies in America spend between $350 - $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:

Graph showing average price of general liability insurance prices per industry

Several factors will determine the price of your policy. These include your:

  • Location
  • Deductible
  • 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.

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Other Types of Coverage tour companies 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 tour companies should obtain:

Commercial Auto Insurance

If you use a business vehicle on public roadways, state law requires you to carry a commercial auto insurance policy. This policy covers the cost to repair or replace third-party property, the company’s damaged vehicle, and any lost/damaged equipment. Because the state-mandated minimums leave many businesses underinsured, you are encouraged to discuss policy coverages at length with your insurance professional.  

Workers’ Compensation Insurance

State law mandates that any business with employees must carry workers’ compensation insurance. This coverage pays medical bills stemming from an on-the-job injury and/or illness and a percentage of the employee’s lost wages when their injuries render them unable to work. If a related lawsuit arises, it also ensures the business owner is properly defended in court and covers awarded damages.

Types of Coverage Some tour companies May Need

In addition to the policies outlined above, there are a few other types of coverage your tour company 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 operates out of a commercial building, you will likely need to purchase a commercial property policy. This policy covers both the structure of your property and any business property lost, stolen, or destroyed in a covered event.

Crime Insurance 

Employee dishonesty, fraud, and forgery are specifically excluded from a standard business owner’s policy. Crime insurance provides coverage if a loss occurs due to criminal activity, reducing the chances of a gap in coverage.

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.