Michigan Rent To Own Store Insurance Policy Information
Michigan Rent To Own Store Insurance. Rent to own stores, also frequently referred to simply as "RTO stores", have a unique business model. Customers can lease high-value items - typically electronics, furniture, or equipment such as lawnmowers - for set periods of time, after which they are free to return the item to the store.
Should they opt to continue the lease, however, the lease fee instead represents installments toward ownership of the item in question. This business model allows consumers or enterprises to gain the use of a new commodity immediately, with the option but not also the obligation to own the product later.
Rent to own stores are similar to other home furnishing stores in that they stock items that a household needs, such as appliances, decorative items, furniture, lamps, and rugs. The difference is that the credit terms are handled in-house.
The store continues to own the items until they are returned or the renter pays off the loan and then owns the items.
The individuals who shop at rent to own places typically have limited or poor credit history. Repossessions are common. The store may repair, strip, reupholster, paint or refinish repossessed items.
Delivery may be on owned vehicles or may be contracted out to another carrier.
Rent to own stores can be extremely successful, regardless of the category of goods they sell. The owners of RTO stores also, on the other hand, take on a significant amount of risk, as rent to own stores can fall victim to any number of unforeseen circumstances.
What types of Michigan rent to own store insurance might be needed? Read on to discover more.
Michigan rent to own store insurance protects your business from lawsuits with rates as low as $47/mo. Get a fast quote and your certificate of insurance now.
Why Do MI Rent To Own Stores Need Insurance?
Insurance is important for numerous reasons - some of which include the facts that certain types of coverage will be mandatory in your jurisdiction and that lenders make doing business with you conditional on your business having the right insurance.
The most compelling reason to take a keen interest in your insurance coverage is, however, that it can save your business from massive monetary losses if your rent to own store were to be impacted by a serious peril.
An act of nature, such as a tornado or earthquake, could cause extensive property damage, for instance. Your MI rent to own store could fall prey to theft or vandalism. Human error or mechanical malfunction could lead to a serious accident.
Then, there are liability risks. An employee could be injured in the workplace, or a customer may sustain trauma on your premises. Your store's activities could accidentally cause damage to third party property. All of these scenarios can lead to costly and time-consuming lawsuits.
For a rent to own store that is not properly insured, the associated costs could be so severe that bankruptcy might be on the horizon. With excellent coverage on your side, however, even these major perils are rendered no more than temporary setbacks from which your store can soon recover.
That, in short, is why investing in the best Michigan rent to own store insurance you can is so essential.
What Type Of Insurance Do Michigan Rent To Own Stores Need?
From the location of your store to the types of goods you lease to own, and from your number of employees to the size of your operation, all the factors that make your business unique also determine your insurance needs.
A commercial insurance broker can help you craft an insurance plan customized to your specific circumstances. Here, meanwhile, is a look at some of the most important types of Michigan rent to own store insurance consider:
- Commercial Property - This kind of insurance protects your rent to own store from financial losses in the event that your premises are impacted by perils such as acts of nature, theft, or vandalism. It covers your building, inventory, and many of your smaller assets.
- Commercial General Liability - When a third party is injured on your premises, or your store's work causes property damage, these Michigan rent to own store insurance policies will cover your legal costs up to a predefined limit, making third party liability claims significantly easier to manage.
- Product Liability - When equipment you lease out malfunctions and causes injury or property damage, your store can still be held responsible despite the fact that the product is not in your possession. Product liability insurance reduces the financial fallout associated with these mishaps.
- Workers Compensation - Should an employee sustain a work-related injury, this form of coverage pays for their medical bills and any lost wages associated with work absences arising from the injury. In the process, carrying workers' comp limits the risk of being sued by employees.
These are merely examples of the kinds of basic Michigan rent to own store insurance policies. Because your insurance needs may be more extensive, it is imperative to consult a skilled commercial insurance broker.
MI Rent To Own Store's Risks & Exposures
Premises liability exposure is high due to the number of visitors to the store. To prevent slips and falls, there should be good lighting and adequate aisle space. Smaller goods should be kept on easily reached shelves so customers do not pull items down on themselves. Shattered glass from broken items must be cleaned up quickly.
Flooring must be in good condition, with no frayed or worn spots on carpet and no cracks or holes in flooring. Steps and uneven floor surfaces should be prominently marked. Sufficient exits must be provided and be well marked with backup lighting systems in case of power failure. As children may climb, jump or play with floor displays, there should be enough employees on duty to supervise activities of customers.
Parking lots and sidewalks need to be in good repair with snow and ice removed, and generally level and free of exposure to slips and falls. If the business is open after dark, there should be adequate lighting and appropriate security for the area. There should be a disaster plan in place for unexpected emergencies.
Employees making deliveries, setting up, and installing purchases may damage customers' premises. If the store recommends independent contractors, certificates of insurance should be maintained to verify that the contractors carry adequate limits of liability.
Personal injury exposures include allegations of discrimination, invasion of privacy from customers unwilling to let items be repossessed, and from apprehending and detaining shoplifters, which may result in claims of assault and battery, false arrest or detention, unauthorized or intrusive searches, or wrongful ejection from the premises. Employees must be trained to deal with unruly customers.
Shoplifting and repossession procedures must be fully understood and utilized by all employees.
Products liability exposure is normally low unless the store reconditions and sells repossessed items or there is direct import of the products. Foreign-made items should come from a domestic-based wholesaler. Any direct importer should be considered as a product manufacturer. Items which are reconditioned between rentals may increase the product liability depending on the repairs made.
Workers compensation exposures are moderate due to employees standing for long hours, the use of computers, cuts, and punctures from broken glass, and restocking which requires lifting and placing items on shelves. Continual standing can result in musculoskeletal disorders of the back, legs, or feet. Trips, slips, and falls are common, as are cuts and punctures from broken glass.
When work is done on computers, employees are exposed to eyestrain, neck strain, and repetitive motion injuries including carpal tunnel syndrome. Lifting can cause back injury, hernias, sprains, and strains. Employees should be provided with safety equipment, trained on proper handling techniques, and have conveying devices available to assist with heavy lifting.
Shelves should be easily accessible for storage. Stepladders should be available. Woodworking, installation or repair work can result in cuts, burns, amputations and eye injuries. Adequate protection using guards and goggles must be required. Housekeeping in storage areas, especially during peak times, is vital in preventing trip and falls.
Cleaning workers can develop respiratory ailments or contact dermatitis from working with chemicals. In any retail business, hold-ups are possible. Employees should be trained to respond in a prescribed manner.
Drivers of delivery trucks can be injured in accidents, be crushed by heavier objects, or fall on stairs or from tailgates. Employees handling repossessions must follow prescribed procedures and be trained in handling unruly customers.
Property exposures are moderate as the stock is extremely flammable and susceptible to damage from fire, smoke, and water. The electrical load is heavy due to floor models being plugged into numerous outlets for customers to try out prior to purchase. Wiring must be up to date and meet current codes.
Flammables such as lubricants, oils, degreasers, and solvents used in the repair operations must be properly stored, separated and controlled. Plastics will feed the fire and cause an oily smoke, which will permeate items reducing any salvage. Some electronic circuitry is easily damaged by smoke, water, and heat, resulting in a total loss even with a small fire. Wood, fabric and packing materials add to the fire potential.
Electronics such as small appliances, televisions, stereos, and computers are easy to steal and may be shoplifted. The higher priced items may be targeted by thieves.
Appropriate security measures should be taken including physical barriers to prevent entrance to the premises after hours and an alarm system that reports directly to a central station or the police department. Business interruption is low as backup facilities are generally available.
Crime exposures are from employee dishonesty and loss of money and securities either from holdup or safe burglary. Background checks should be conducted on all employees handling money. There must be a separation of duties between persons handling deposits and disbursements and reconciling bank statements.
Money should be regularly collected from cash drawers and moved away from the collection area, preferably to a safe on premises. Bank drops should be made throughout the day to prevent a buildup of cash on the premises.
Inland marine exposures are from accounts receivable if the store offers credit, computers to transact sales and monitor inventory, goods in transit for deliveries and items transported between stores, and valuable papers and records for rental agreements and vendors' information. Backup copies of all records, including computer files, should be made and stored off premises.
Business auto exposure comes from both pickup and delivery. Anyone who uses a vehicle must have a valid license and acceptable MVR. Vehicles should have regular maintenance with records kept.
Michigan Rent To Own Store Insurance - The Bottom Line
To learn more about the specific types of Michigan rent to own store insurance policies you'll need, how much coverage you should carry - and the costs, consult with a reputable agent that is experienced in commercial insurance.
Michigan Economic Data And Business Insurance Requirements
Business owners who are interested in establishing operations Michigan must have a thorough understanding of the state's economy. They should also familiarize themselves with any regulations and limits that state may have in place for commercial insurance.
Any entrepreneur who is thinking about starting a business in the Great Lake State first needs to determine if it's a feasible location for business operations. As such, it's important to have a keen understanding of pertinent details regarding the economy of Michigan, in addition to the types of insurance coverage that are mandatory for corporations that operate within the state.
Economic Trends for Businesses In Michigan
After a long period of stagnant job growth in the early part of the 21st century, MI has been experiencing a steady increase in employment gains. Between 2009 and 2018, the state has enjoyed a period of uninterrupted job growth; the longest stretch of job growth since World War II. According to economists at the University of Michigan. While there has been a slight decline in the rate of job growth, job creation continues and forecasters say will continue for the next two years, into 2021.
In 2018, an estimated 55,200 jobs were created; in 2019, it's expected that 35,800 jobs will be created, and in 2020, economists believe that there will be a total of 39,300 jobs created in Michigan. While that rate of growth is 1.9 percent slower than the job growth rate between 2011 and 2016, it is still a steady increase overall. In total, approximate 683,200 jobs will be created in MI between 2099 and 2020; almost four out of the five jobs that were lost during the early part of the 21st century will be recovered.
While the unemployment rate has steadily improved, it is still above the national average. In March of 2019, the national unemployment rate was 3.8 percent, while in the state of Michigan, it was 4.0 percent. Mid-Michigan has experienced the largest growth rate in the state, and according to forecasters, it looks like that trend will continue, moving forward. Industries that are expected to see the most growth include:
- Energy, due largely to research and development in clean energy
- Food and agriculture
- Transportation and mobility
- Healthcare industry
- Information and technology
In the state of MI, business owners are not legally required to carry liability insurance; but most entrepreneurs opt to invest in a General Liability or Business Owner's Policy (BOP). A commercial auto insurance policy is also required for any businesses that use motor vehicles to conduct any aspect of their business operations. Workers' compensation insurance is also required for any businesses with non-owner employees. While the following forms of coverage are not required, depending on the type of business you operate, they are recommended:
- Data breach insurance
- Business income insurance
- Commercial Umbrella insurance
Additional Resources Retail Insurance
Read valuable small business retail insurance policy information. In a retail business, you need to have the right type of commercial insurance coverage so that your store, employees, and inventory are protected.
- Adult Novelty
- Antique Dealers
- Appliance & Electronics Store
- Army Navy Surplus Stores
- Art Dealers
- Art Gallery
- Arts & Crafts Supply Stores
- Bicycle Shop
- Boat Dealers
- Book Store
- Bridal Shop
- Candy Confectionery Store
- Carpet Store
- Cell Phone Stores
- Clothing Store
- Collectibles Memorabilia Store
- Consignment Stores
- Convenience Store
- Cosmetics Store
- Costume Stores
- Dry Cleaning
- Embroidery Services
- Equipment Rental
- Fabric Stores
- Fish Markets
- Flea Markets
- Funeral Home
- Furniture Store
- Gift Store
- Greeting Card Stores
- Hardware Store
- Harness & Saddle Shops
- Home Improvement Store
- Infant, Baby & Children's Clothing Stores
- Jewelry Store
- Lamp Stores
- Lingerie Store
- Luggage Store
- Meat Market & Butcher Shop
- Men's Clothing Stores
- Music Store
- Office Supply Store
- Paint & Wallpaper Store
- Pawn Shop
- Pet Store
- Pharmacy Liability
- Plumbing Supplies Fixtures Store
- Poultry Dealers
- Rent To Own Stores
- Scrap Metal Dealers
- Sewing Store
- Shoe Store
- Sporting Goods Store
- Stationary Store
- Thrift Store
- Ticket Agency
- Tire Store
- Tobacco Store
- Toy Store
- Travel Agency
- Trophy Stores
- Tuxedo And Formal Wear Rental Store
- Vending Machine Operators
- Wig Store
- Women's Clothing Stores
Retail stores are susceptible to premises liability claims because of customer traffic, but large department and specialty stores are more susceptible than most.
All retail stores have significant property exposures. The on-hand stock represents a considerable investment, but the amount on hand fluctuates seasonally. For this reason, physical damage insurance on this property must be arranged carefully. When the insured occupies a non-owned building, insurance coverage must be arranged for the insured's interest in extensive improvements and betterments made to the premises.
Crime insurance, in the form of employee theft and money and securities coverage, is also very important.
The businessowners policy was designed with retail exposures and operations in mind. For this reason alone, it should always be the first type of package coverage to consider. However, for those risks not eligible for the business owners policy program, the commercial package policy (CPP) is a practical and convenient way to combine a number of coverages into one policy.
Retail businesses generate income through interaction with customers. This interaction is also how a customer can sustain an injury and then sue the retailer for damages. Hazards, exposures and operations both on premises and off are important and must be covered, but liability the retailer may incur because of the merchandise sold must also be considered and insurance protection arranged.
Inventory or stock is the major property exposure for most retail operations. Because stock values tend to fluctuate or have significant peaks at certain times of the year, value reporting or peak season valuation options should be considered. Business income coverage, including business income from dependent properties coverage, may mean the difference between a retail operation staying in business or being forced into bankruptcy following a loss.
When the insured occupies a non-owned building, insurance coverage must be arranged for the insured’s interest in extensive improvements and betterments made to the premises.
Most retail businesses offer endless opportunities for a variety of criminal activities. For this reason, the coverages needed must be carefully evaluated. Holdup and robbery losses may be the most obvious concerns but employee theft, fraud and counterfeit money losses are also serious issues that cannot be dismissed.
Retail businesses are gaining greater exposure to international issues because of the growth in sales via the internet. As these sales increase, the added exposures faced by these retailers must be evaluated. While their operating horizons are expanding so are their potential loss exposures.
Minimum recommended small business insurance coverage: Business Personal Property, Business Income and Extra Expense, Equipment Breakdown, Employee Dishonesty, Money and Securities, Accounts Receivable, Computers, Valuable Papers and Records, General Liability, Employee Benefits, Umbrella, Hired and Non-owned Auto & Workers Compensation.
Other commercial insurance policies to consider: Building, Earthquake, Flood, Leasehold Interest, Real Property Legal Liability, Computer Fraud, Forgery, Bailees Customers, Goods in Transit, Jewelers Block, Cyber Liability, Employment-related Practices, Business Auto Liability and Physical Damage and Stop Gap Liability.
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