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 ZOO
Example 1: A visitor to the zoo is walking down a staircase when she slips and falls on the steps, injures herself, and requires transportation by ambulance to the hospital. She demands that your business pay for her medical treatment. Your general liability policy will likely cover her medical costs if you file a claim with your insurer.
Example 2: One of your zoo employees is carting feed for the elephants when she loses control of the hand cart. The cart slides into a zoo visitor, knocking her down and resulting in a head injury. The visitor decides to take legal action against your business. Your general liability policy will cover the cost of your legal defense, including the cost of hiring an attorney and of any settlement that might be required.
Example 3: A zoo in another city in your state has decided that your logo is taken directly from their logo and takes legal action against your business. Your general liability policy will pay for the cost of your legal fees. If it is necessary for you to settle with the other zoo over the logo, you can rely on your policy to cover the cost of the settlement as well.
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, zoos in America spend between $300 - $700 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 zoos 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 zoos should obtain:
Workers’ Compensation Insurance
Your zoo employees most likely need to be covered by workers’ compensation insurance to meet state requirements. The workers’ comp policy you purchase is useful for more than meeting legal requirements, though. It serves as protection for your employees and your business. If an employee is injured on the job performing job-related duties, the policy will pay for his or her medical care. It will also help cover lost wages while the employee recovers.
Commercial Property Insurance
The cost of getting the equipment and supplies needed to open and operate a zoo is substantial. Any major loss of these items can come with a significant financial burden. A commercial property policy is intended to protect against such a situation. If your property is damaged or lost due to a covered event, you can file a claim to help replace your lost property and get back on your feet.
Types of Coverage Some zoos May Need
In addition to the policies outlined above, there are a few other types of coverage your zoo 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 Auto Insurance
If you have one or more company vehicles used primarily for business, you need commercial auto insurance. A commercial auto policy protects your business in several ways. It covers the cost of fixing or replacing damaged vehicles and pays for medical care for drivers and passengers involved in accidents. And if you or your employee cause an accident, commercial auto insurance will pay for damages and medical care for the other vehicle and its occupants.
Commercial Umbrella Insurance
The general liability policy you carry will protect your business in most situations. However, there are some instances, such as major lawsuits, when the policy limits may be exceeded. You can purchase additional protection through a commercial umbrella policy. The umbrella policy will pick up where the general liability policy leaves off. This can protect you from paying any remaining damages out of pocket.
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.