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 VOICE-OVER SERVICE BUSINESS
Example 1: You record a voice-over session for one movie, but release the wrong soundtrack to a different film. Your client is unable to meet their deadline and sues for breach of contract. General liability insurance would cover the costs associated with the lawsuit.
Example 2: You record a voice-over session for one movie, but release the wrong soundtrack to a different film. Your client is unable to meet their deadline and sues for breach of contract. General liability insurance would cover the costs associated with the lawsuit.
Example 3: Your employee damages one of your client’s vehicles when they’re trying to maneuver a bulky package to the door. General liability insurance would pay for the costs to fix your client’s car.
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, voice-over services in America spend between $350 - $900 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 voice-over services 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 voice-over services should obtain:
Commercial Property Insurance
If you own your own studio, you’ll need commercial property insurance to cover the equipment and the structure. Every policy will differ based on your state and business needs, but most commercial property insurance covers damage from events like fire, criminal activity, and extreme weather.
Professional Liability Insurance
If your business advises clients on how to structure their voice-over content, then professional liability insurance is available in case an employee omits a crucial piece of information. For example, if you give a disclosure statement at the end of a commercial and the client leaves out an important detail based on your advice, this insurance would cover any legal costs associated with the fallout.
Workers’ Compensation Insurance
This insurance needs to be made available to all employees, regardless of whether they work from home or in the studio. Workers’ compensation insurance provides financial compensation in the event a worker is injured while on the job.
Types of Coverage Some voice-over services May Need
In addition to the policies outlined above, there are a few other types of coverage your voice-over service 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 Umbrella Liability Insurance
Umbrella insurance covers a voice-over service if their general liability policy reaching its maximum limits. A single lawsuit can quickly exceed the financial threshold of a general liability policy, but umbrella insurance can help cover additional expenses to keep your business afloat.
Home-Based Business Insurance
If you operate your voice-over services from home, this insurance covers your equipment as well as the space used for your business. A general homeowners policy may not cover commercial expenses, such as recording tools and administrative equipment.
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.