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 YOGA INSTRUCTOR
Example 1: You are late to teach a yoga class and are rushing to get into the studio. You round a corner and run into a student, knocking her to the ground. She breaks her wrist and later decides to sue you for damages. Your general liability insurance policy would pay for your legal defense fees, including the cost of a settlement if one is necessary.
Example 2: You have been interviewed by a local news agency about the rise in popularity of yoga in your area. Not long after, you get an email telling you that a yoga studio is suing you for slander for something you said during the interview. You are not sure what you said that would be considered slander, but you need an attorney to defend yourself regardless. Your general liability insurance would pay for your legal fees.
Example 3: You are the last teacher to leave the studio in the evening. The next morning, you get a call from the owner of the studio who says you that failed to lock the doors and someone came in and vandalized the place. The studio is suing you for damages. Your general liability insurance would cover your legal fees to defend yourself, including the cost of a settlement if one was required.
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, yoga instructors 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:
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 yoga instructors should obtain:
Professional Liability Insurance
A professional liability insurance policy is designed specifically for you and your business. It helps to protect you from negligence claims due to errors or failure to perform. For example, if a student claimed that your teaching caused him or her injury and sues you, your policy will pay for your legal fees. It would also pay for the cost of a settlement if you need to settle the case out of court.
In addition to the policies outlined above, there are a few other types of coverage your yoga instructor 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
An umbrella policy would provide additional protection beyond what your general liability insurance policy provides. For example, if you lost a major lawsuit and your general liability insurance limits were exceeded, your umbrella policy would kick in and pay the remaining damages until its limits were reached.
Home-Based Business Insurance
If you teach yoga out of your home, your homeowner’s insurance may not protect you against work-related accidents. Home-based business insurance would provide protection. You may be able to get a policy added to your homeowner's policy or get coverage as part of a business owner’s policy.
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.