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 WEDDING PLANNING BUSINESS
Example 1: You run a wedding planning business from home and invite a client to come over for a consultation. The client trips down your basement stairs, breaking her arm on the hard wooden steps in the process. If found liable, general liability insurance could assist in covering court-mandated damage payments or any settlements.
Example 2: During her ceremony, a bride trips on the carpet you selected and had professionally installed in the center of the aisle. Her ankle breaks and she has a panic attack in the middle of the aisle. If found liable for the incident, general liability insurance would likely assist in covering some of the damages, both physical and psychological, as ordered by the court. Any settlement reached would probably be similarly covered.
Example 3: Your scheduled caterers provide spoiled food to wedding guests, resulting in some serious food poisoning across many people. If found liable for damages, general liability insurance would probably help to cover anything your business ultimately owed.
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 wedding planning business in America spends 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.
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OTHER TYPES OF COVERAGE WEDDING PLANNING 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 wedding planners should obtain:
Professional Liability Insurance
This policy is for businesses that thrive on, among other things, professional advice or carefully rendered services of great import. Wedding planners make a living out of crafting important events and providing professional advice. If something goes wrong and your services end up compromising the value of the wedding, your business could find itself in hot water. Keep your planning business covered with professional liability insurance, which is designed to handle damages owed from professional negligence or the failure to provide promised services.
Commercial Property Insurance
If your wedding planning business wants to succeed, you will undoubtedly operate from a location containing various supplies, computers, and more. Losing these assets to disasters like fire or violent weather can be crippling to a business. Commercial property insurance keeps you covered for incidents just like these, protecting business-related property that you own as well as any affected owned real estate.
TYPES OF COVERAGE SOME WEDDING PLANNING BUSINESSES MAY NEED
In addition to the policies outlined above, there are a few other types of coverage your wedding planning 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 Insurance
Commercial umbrella insurance represents a special policy that is taken in tandem with other policies. When your coverage for certain assets is maximized, but you would like to extend that coverage even further, consider a policy like this one. Given the huge number of variables involved in executing a wedding, planning businesses may encounter scenarios that are particularly unpredictable. Umbrella policies go above and beyond normal coverage to protect your business from these risks.
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.