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 VINEYARD BUSINESS
Example 1: A potential business investor is visiting your vineyards to see how your crops are growing and get a feel for general operations. As he steps out onto the recently turned soil, he falls into a substantial hole and sustains serious injuries in the fall. He decides to sue your company for medical costs and additional pain and suffering damages. Your general liability policy would cover the cost of your legal defense, including the price of a settlement if one is required.
Example 2: A customer has come to purchase multiple cases of wine. As an employee carts the boxes of wine out of the building, she loses control of her hand cart and it slams into the back of the customer’s luxury vehicle. The damages are extensive, and the customer threatens to sue. Your general liability policy would the cost of damages and assist with repairs if you file a claim.
Example 3: Your biggest competitor has contacted your attorney to let her know that they are filing a lawsuit. They claim that you have libeled their company in a recent ad campaign. While you are sure your commercials were free from accusations, you can contact your insurer to file a claim. If you are sued for libel, general liability coverage would pay for your legal fees.
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, vineyards in America spend between $500 - $1,200 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 vineyards should obtain:
Commercial Property Insurance
It’s no secret that it takes a considerable amount of capital to start up a successful vineyard. If you were to lose your inventory in a fire or other unexpected disaster, it would be a struggle to replace it all. With commercial property insurance, you can file a claim to request financial assistance from your insurance provider that helps to restore any commercial property covered by your policy.
Product Liability Insurance
While you work to produce the highest quality products at your vineyard, it is vital that you protect your business. A customer could easily decide that one of your products caused them harm and file a lawsuit to seek damages. Product liability insurance gives you peace of mind by covering your legal fees and the cost of any awarded settlements in a lawsuit.
In addition to the policies outlined above, there are a few other types of coverage your vineyard 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.
Workers’ Compensation Insurance
Your employees are exposed to a unique set of risks each day as they help to operate your vineyard. Workers’ compensation insurance works to protect your business and your employees in the event of a work-related accident, and it ensures you meet state requirements for employers. If an employee becomes injured at work or falls ill after a work accident, this essential coverage will help to cover their medical costs and even lost wages.
Commercial Umbrella Insurance
Even though you’ve made the smart decision to invest in comprehensive business insurance, there is always a chance that those primary policy limits could be exceeded in a big lawsuit. While this doesn’t occur frequently, your commercial umbrella policy will work to go beyond those primary policy limits and prevent you from having to cover the remaining damages out of your own pocket.
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.