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 WALKING TOUR BUSINESS
Example 1: During a tour, a pickpocket takes the wallet of one of the guests. They blame you for taking them to an unsafe area of town and failing to give a proper warning. They decide to sue for both monetary loss and emotional damages. General liability insurance would cover the costs to either fight or settle their claim.
Example 2: When you’re giving your presentation, you use your arms to illustrate your words. During one of your tours, you knock a person’s expensive sunglasses off their face and accidentally injure their eye. General liability insurance would cover the costs associated with replacing the sunglasses and treating their injuries.
Example 3: The name of your walking tour business is similar to that of another tourist-related company in the same area. The other company believes you are intentionally stealing business and decides to file a lawsuit for lost income. General liability insurance would protect your walking tour company by covering costs associated with fighting or settling the claim.
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, walking tour businesses in America spend between $500 - $1,100 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 walking tour businesses 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 walking tour businesses should obtain:
Commercial Property Insurance
Some walking tour businesses will have a small office or structure where guests can check-in before they get started on the tour. If you own this space, you’ll need commercial property insurance to protect it in case of damage due to inclement weather, fire, or criminal activity.
Workers’ Compensation Insurance
Workers’ compensation insurance should be made available for all staff, whether they work once a week or every day of the month. Cities and towns can be dangerous places, and there are far more ways to be injured outdoors than in an air-conditioned office. This insurance will cover expenses associated with both acute and chronic injuries sustained on the job.
Data Breach Insurance
If your customers book primarily online, data breach insurance is available to cover the costs associated with a hack. If a cybercriminal steals your customers’ financial and biographic information, data breach insurance can help protect your livelihood and safeguard your reputation.
Types of Coverage Some walking tour businesses May Need
In addition to the policies outlined above, there are a few other types of coverage your walking tour 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
Commercial liability insurance is available only if a general liability policy reaches its maximum payout for a claim against your company. For example, if a customer alleges that they sustained injuries due to your business, it may take several months to successfully fight the claim. General liability insurance may only cover a month of legal fees, but an umbrella policy gives the owner the means to continue without having to dip into their own personal funds.
If you operate your walking tour business from home, this insurance will keep your equipment and structure safe. A typical home insurance policy will not cover commercial supplies or tools.
Commercial Auto Insurance
This insurance is available if you transport guests to and from a specific base. Because you’re using the vehicle for commercial purposes, your personal auto insurance policy may deny certain claims associated with injuries or property damage. Commercial auto insurance will cover damage to your vehicle, it’s passengers, and contents in the event of an accident. It will also cover damage or injury to others involved in the accident if you or your employees are found liable.
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.