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 TRAMPOLINE PARK
Example 1: The risk of your patrons colliding with another person on a trampoline or landing improperly while doing stunts on a trampoline is very high. If one or more customers become injured at the park and you are found to be negligent, general liability insurance will likely cover any damages.
Example 2: A child is running to keep up with their friends during a birthday party at the trampoline park and trips over a vacuum cord that is being used by an employee. If your business is sued to help pay for medical costs, general liability coverage will likely pay for damages.
Example 3: Your trampolines were checked and serviced last week, but a visitor has just started jumping in a section where a spring came loose, and they’ve fallen through a hole, injuring their leg. Even though you’ve been keeping up with maintenance, you are found liable for their injuries. General liability will protect your business in the event that you are involved in a lawsuit.
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 trampoline park 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 TRAMPOLINE PARKS 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 trampoline parks should obtain:
Workers’ Compensation Insurance
Your employees will work in an environment where they are at risk of becoming injured on the job. With workers’ compensation coverage, you can provide peace of mind for your employees with insurance that will help to cover medical costs and lost wages in the event that they are injured or become ill on the job.
Commercial Property Insurance
If you own the building that your trampoline park is located in, investing in commercial property coverage is a must. This type of insurance protects the building and covers any business-related items that are stored in the building in the event of an accident, natural disaster, theft, or vandalism
TYPES OF COVERAGE SOME TRAMPOLINE PARKS MAY NEED
In addition to the policies outlined above, there are a few other types of coverage your trampoline park 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 Umbrella Liability Insurance
Even if you require visitors to your trampoline park to sign waivers, your business still has a responsibility to do everything you can to prevent injuries. If you are found liable for an accident at your park, the costs of a lawsuit can easily surpass the limits of your primary policies. Commercial umbrella liability insurance is designed to go above and beyond those limits to protect your business.
Data Breach Insurance
If you offer a loyalty program as an incentive for your customers, you are likely storing personal information such as addresses, phone numbers, and credit cards in your computer system. Data breach insurance will step in to protect your business and cover damages in the event that your system is compromised and sensitive customer information is stolen.
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.