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.


Example 1: A bed bug manages to hide in one of your wigs. After a customer buys it, their home is infested with the insects and they sue your company for property damage and extermination costs. General liability insurance would likely cover the associated costs of their claim.

Example 2: A customer walks into your wig store and trips on a loose piece of carpet at the front of the door. General liability insurance would likely pay for the medical bills associated with their injuries.

Example 3: Your wig store name is similar to that of a cosmetics store in an adjacent town. The cosmetics store sues your company for copyright infringement and lost business. General liability insurance would likely help cover legal costs, whether you decide to fight the claim or not.

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, wig stores in America spend between $350 - $750 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:

Graph showing average price of general liability insurance prices per industry

Several factors will determine the price of your policy. These include your:

  • Location
  • Deductible
  • 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 Wig Stores 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 wig stores should obtain:

Commercial Property Insurance

If you own a retail location for your wig store, you’ll need property insurance to cover the physical structure, grounds, and inventory. Many of your wigs may be expensive investments, and this insurance can help you replace products lost to theft, vandalism, or inclement weather.

Business Interruption Insurance

Business interruption insurance will continue to provide you with an income should your retail location have to close for a covered reason. For example, if your structure needs to undergo major repairs due to an unexpected storm, you’ll maintain a cash flow even while the store is closed to the public.

Workers’ Compensation Insurance

If you have any full-time or part-time employees working for you, you’ll need workers’ compensation to cover them if they sustain injuries while on your premises or running work-related errands. This insurance will cover employees from sudden accidents as well as chronic injuries (e.g., shoulder pain, back pain) that may have developed as a result of their duties.

Product Liability Insurance

This insurance is available to cover any defective products you sell, including wigs, accessories, hair-care solutions, and more. It serves as an extended form of general liability insurance, covering medical costs that may arise from an inferior product. For example, if the dye from a hair wig gives the wearer a rash on their scalp, you can use product liability insurance to help pay for legal or medical expenses.

Types Of Coverage Some Wig Stores May Need

In addition to the policies outlined above, there are a few other types of coverage your wig store 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

This insurance is available to wig store owners if their general liability policy reaches its maximum limits. A single lawsuit may last for months in court, and general liability insurance may only pay for a portion (e.g., $100, 000) of the legal expenses. Umbrella insurance can be invoked after a general liability policy has paid out its maximum amount, allowing a business owner to continue protecting their livelihood.

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.