Company insurance is intended to safeguard the financial assets of a business owner and is a vital investment for a lemonade stand.
This article will discuss the primary insurance coverage for lemonade stands, general liability insurance, as well as additional policies that are appropriate for this industry.
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Lemonade Stand General Liability Insurance
Every firm, regardless of sector, has risks that should be insured. General liability insurance is the most frequent and comprehensive form of coverage that company owners purchase.
General liability insurance covers the following risks:
Physical harm
Damage to property
Medical expenses
Legal defence and decision
Personal and commercial harm
While general liability insurance is not legally needed for companies, operating without it is exceedingly dangerous. If your company is sued, you might face costs in the hundreds of thousands of dollars (or more). The only way to avoid this sort of catastrophe from destroying your organisation is to have an adequate general liability insurance coverage in place to assist pay for these losses.
GENERAL LIABILITY INSURANCE MAY COVER COMMON SITUATIONS FOR A LEMONADE STAND
Example 1: A client stumbles over your stand while buying lemonade from your mobile stand and receives injuries. His/her medical expenditures might be covered by general liability insurance.
Example 2: You want to sell your lemonade at a mall vending machine. As part of the leasing agreement, the mall owner wants proof of liability insurance. This need should be met with the use of a general liability coverage.
Example 3: As you move your stand, the wheel slips off, causing a wide gash in the paved parking lot. The repair expenses should be covered by general liability insurance.
Example 4: A consumer returns a bought lemonade after discovering a piece of plastic in it. They file a lawsuit against you. Your general liability insurance should cover your legal expenses as well as any monetary damages awarded by the court.
Of course, this is not an entire list of risks covered by a general liability insurance policy, and certain situations may result in a specific peril not being covered. To minimise coverage gaps, it’s always better to speak with your agent about the terms of your policy.
General Liability Insurance Cost
Lemonade stands in America typically pay between $300 and $800 per year for $1 million in general liability insurance.
The cost of your coverage will be determined by a number of variables. Among them are your:
Location
Deductible
Employees’ number
Per-occurrence restriction
The overall aggregate limit
You may be able to get general liability insurance at a lower cost if you buy it as part of a business owner’s policy (BOP) rather than as a separate policy. A business interruption policy (BOP) is a more complete option that covers numerous types of coverage, such as business interruption and property insurance.
Lemonade Stands Require Additional Coverage
While general liability insurance is the most crucial, there are various different types of coverage to be aware of. Other forms of insurance that all lemonade stands should have are as follows:
Insurance for Home-Based Businesses
Many small enterprises operate from their homes to save overhead costs. Most homeowners insurance, however, exclude commercial property and losses. When a property damage loss happens, this might leave firms uninsured or underinsured. Check with your homes insurance company to see whether an extension of coverage for an extra premium is available.
If not, home-based business insurance may be purchased as part of a company owner’s coverage (BOP).
Insurance for Product Liability
Product liability insurance does not cover claims arising from the manufacture, distribution, and sale of your items. Customers who allege carelessness on your side, regardless of justification, have the right to sue you in court. This coverage offers legal counsel and covers court-awarded damages.
Coverage is often offered as part of a business owner’s policy (BOP), which you may modify to your specific requirements.
Coverage Options for Some Lemonade Stands
In addition to the insurance listed above, your lemonade stand may need other forms of coverage based on specific features of your business. Some of them may not apply to you, so be sure to ask your agent whether policies are appropriate for your company.
Insurance for Business Interruption
Unfortunately, commercial property losses are common and may take months to recover from. Many entrepreneurs obtain business interruption insurance to protect themselves from financial ruin. This coverage may assist cover the costs of establishing a temporary site, as well as additional expenses and missed revenue during the recuperation period.
This insurance is often included in a business owners’ policy (BOP) package.
Insurance for Commercial Vehicles
While personal car plans exclude automobiles used for commercial reasons, the state requires a policy. To comply with state regulations, your company needs acquire commercial car insurance. This coverage covers the cost of repairing or replacing damaged owned vehicles, liability claims, lost equipment, and medical expenditures.
Commercial car insurance is often obtained separately. Some carriers may also include it as an endorsement to a company owner’s policy (BOP).
Additional Security Measures for Your Company
Although investing in company insurance is simple (and necessary), it should not be your first line of defence. Yes, insurance will reimburse your company for cash losses incurred as a result of an occurrence, but it is much preferable to avoid losses altogether.
With this in mind, here are a few steps you can take to better secure your company:
Make use of legally binding contracts and other business agreements. (We provide free templates for several of the most often used legal forms.)
To safeguard your personal assets, form a limited liability company (LLC) or a corporation. (To discover how to incorporate an LLC or company in your state, see our step-by-step tutorials.)
Keep your company licences up to date.
Streamline the internal procedures of your company. This will eliminate unneeded variables from routine activities and establish a secure, consistent environment in which to do business.
If your company is an LLC, you should check into LLC insurance.