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 YOUTUBER BUSINESS
Example 1: Your video content is similar to that of another content creator, and they decide to sue you for copyright infringement and lost viewership. General liability insurance would likely cover the costs if you choose to fight the claim in court.
Example 2: One of your viewers feels slandered by your content, and they file a claim against you for personal damages. General liability insurance is likely to pay for the legal costs to either settle or fight the claim.
Example 3: You have a guest host come to your recording area for a special session. When they leave, they trip over a cord that was left in the walkway. General liability insurance would likely cover the costs of any medical expenses that result from the fall.
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, YouTubers in America spend between $350 - $900 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 youtubers 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 YouTubers should obtain:
Commercial Property Insurance
If you own a recording studio for your YouTube business, you’ll need commercial property insurance to cover any damages that occur from natural disasters, vandalism, or fires. This insurance covers your commercial equipment (e.g., cameras, lighting), as well as the physical structure of the property.
Professional Liability Insurance
If you give professional advice on YouTube, you’ll need professional liability insurance in case you make an error or omit important information that affects your viewers in a negative way. This insurance is designed to cover any formal claims against you if someone believes they suffered a loss due to your content.
Home-based insurance is available to cover your commercial equipment and space if you operate your business from your home. A typical renters or home insurance policy is unlikely to cover commercial expenses you may incur in the course of home-based business operations.
Types of Coverage Some youtubers May Need
In addition to the policies outlined above, there are a few other types of coverage your YouTuber 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 to supplement a general liability policy once it reaches its limits. A general liability policy has financial limits placed in terms of how much a business owner can receive (e.g., $50,000 for legal expenses). Umbrella insurance will continue to pay above and beyond in case a serious lawsuit is filed against you.
Workers’ Compensation Insurance
Most YouTube businesses start as one-man shows, but you’ll need workers’ compensation insurance if and when you officially hire a part-time or full-time employee. This insurance covers all employees from accidents or injuries while on the clock. You will not need workers compensation for contracted employees.
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.