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 YOUNG ADULT BOOKS BUSINESS
Example 1: When a customer enters your bookstore, they trip on a box of books that was left near the doorway. General liability insurance would likely cover the costs of the customer’s medical bills.
Example 2: Your bookstore’s logo is similar to that of another bookstore in the state. The other bookstore decides to sue you for copyright infringement, even though they don’t specifically sell young adult books. This insurance will cover the costs to fight the lawsuit if you want to keep your logo.
Example 3: You hope to join a franchise operation for your young adult bookstore. You may need a certain amount of general liability insurance to be considered.
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, young adult books businesses in America spend between $300 - $800 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 young adult books businesses should obtain:
Commercial Property Insurance
If you own the space for your bookstore, this insurance is available in case of natural disaster, theft, vandalism, or fire. You can count on commercial property insurance to cover both the physical structure of your bookstore as well as the grounds and any inventory destroyed in a covered event.
Business Interruption Insurance
Your bookstore is primarily dependent on having physical inventory to offer your customers. Business interruption insurance continues to provide business owners with an income (based on previous sales) if they cannot operate for a sustained period of time. Covered events vary based on the policy, but are typically the same as those covered by a commercial property policy.
Workers’ Compensation Insurance
All workers will need workers’ compensation insurance in case of accident or injury on the job. This policy covers sudden accidents, such as falling off a ladder while restocking books, or chronic injuries, such as back pain from moving boxes of inventory over the course of several years.
Product Liability Insurance
This insurance covers defective products that may cause injury or property damage to your customers. For example, if a customer gets an infestation of bed bugs and it’s determined that the source originally came from the pages of one of your books, your property liability insurance will likely cover the expenses of a lawsuit against you.
In addition to the policies outlined above, there are a few other types of coverage your young adult books 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
This insurance is available for when a general liability policy hits its maximum limits. A general liability policy may cover a number of events, but it will only pay out up to its financial threshold (e.g., $75,000). Umbrella insurance can continue to cover a business if a legal claim is exceptionally expensive.
If you keep any of your inventory in your home (either as excess stock or to sell online), you may need home-based insurance to cover your stock in case it is damaged. A general home or renters policy may not cover commercial property in the case of damage or theft.
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.