Clothing Store Insurance Policy Information
Clothing Store Insurance. Clothing stores can sell a variety of new and used clothing and accessories for men, women, children, and infants. Some are "specialty" stores that sell to one type of customer, such as men, or sell a specific type of merchandise such as hosiery, wedding dresses, or athletic wear.
The store may be independent or part of a regional or national chain. Tailoring or alteration services may be offered to customers. Some may offer delivery services.
So do you own or are you seeking to start a clothing store? If so, it is very crucial, as a business owner, that you cover yourself from potential lawsuits by buying business insurance. However, even before you buy insurance, you first must have a solid business plan outlining your risks as a business owner and ways you plan to cover these risks.
First, you must know what your risks are - as not all of your risks as a store owner can be covered simply by buying a basic clothing store insurance policy.
Clothing store insurance protects your shop from lawsuits with rates as low as $37/mo. Get a fast quote and your certificate of insurance now.
Below are some answers to commonly asked clothing store insurance questions:
- What Is Clothing Store Insurance?
- How Much Does Clothing Store Insurance Cost?
- Why Do Clothing Stores Need Business Insurance?
- What Type Of Insurance Do Clothing Stores Need?
- What Are Clothing Stores Risks & Exposures?
- What Does Clothing Store Insurance Cover & Pay For?
What Is Clothing Store Insurance?
Clothing store insurance is a type of insurance that specifically covers clothing retailers. It typically includes coverage for property damage, liability, and business interruption.
This insurance can protect clothing stores from losses due to theft, fire, natural disasters, and other types of damage. It can also provide coverage for third-party injuries or damage caused by the store's employees.
Additionally, it can cover the costs of lost business income if the store is forced to close temporarily due to a covered event.
How Much Does Clothing Store Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small clothing stores ranges from $37 to $49 per month based on location, size, payroll, sales and experience.
Why Do Clothing Stores Need Business Insurance?
Clothing stores need insurance for a variety of reasons, including protection against loss or damage to inventory, liability for accidents or injuries that occur on the premises, and protection against financial loss due to theft or other criminal activity. Insurance can also help cover the cost of legal fees and damages in the event that the store is sued for any reason.
One of the main reasons why clothing stores need insurance is to protect their inventory. Clothing stores often carry large amounts of clothing, accessories, and other merchandise, which can be costly to replace if it is lost or damaged. Insurance can help cover the cost of replacing lost or damaged inventory, allowing the store to continue operating without financial strain.
Liability insurance is another important type of coverage for clothing stores. This type of insurance can protect the store against lawsuits related to accidents or injuries that occur on the premises. For example, if a customer slips and falls while shopping in the store, the store could be held liable for any injuries or damages that result. Liability insurance can help cover the cost of legal fees and damages if a lawsuit is filed against the store.
Finally, clothing stores need insurance to protect against financial loss due to theft or other criminal activity. While most stores have security measures in place to prevent theft, there is always a risk that criminal activity could occur. Insurance can help cover the cost of stolen merchandise or damage to the store, allowing the store to recover from these types of losses.
Overall, clothing stores need insurance to protect against a variety of risks that could impact their operations and financial stability. Without insurance, clothing stores may be vulnerable to financial losses that could potentially put them out of business.
What Type Of Insurance Do Clothing Stores Need?
As a small business owner, you may be thinking over the choices available when it comes to the apparel insurance coverage types your company needs. It is important how each type of policy coverage protects you, your business, and your employees. Below is a list of common clothing store insurance types that will provide you with plenty of options for insuring your store and covering a range of risks:
- General Liability - This insurance coverage is a must for apparel shops because you've so much customer traffic every day. Your clothing store is at risk for a potpourri of liabilities, which include a customer sustaining a bodily harm from tripping and falling on the side-walk at your storefront, a garment having a pin-stuck in it which harms the customer, they injure themselves on a clothe rack, or the property of a customer being damaged because of a falling display in the store. General liability will handle damages and costs of associated legal expenses if a customer sues the store for negligence. It protects your customer's property, offers product liability protection, as well as advertising protection.
- Business Property Insurance - Whether from fire, natural disasters, or extreme weather conditions, any store is vulnerable to property damage. Commercial business property insurance can protect against damage to business property including inventory and buildings. Often, a clothing boutique has a significant amount of its business value tied up in inventory. Water, smoke, and fire damage can ruin clothing completely, whereas they might only do partial damage to the inventory of other business types.
- Workers Compensation - Owners of clothing store are employers. As an employer, you're required by law to have workers compensation insurance on each and every one of your employees. Workers comp coverage pays the medical bills and related expenses of the employees if they're ever injured while working. As a no-fault type of insurance, this means that neither you nor your employee needs to prove that there is fault somewhere before the policy pays the employee's benefits.
- Commercial Auto Insurance - All of the cars you use for clothing store business operations needs to be covered by commercial auto policy. This coverage protects you from any losses caused by auto accidents, theft, or vandalism. If one of your vehicles gets damaged in an accident, this coverage pays for repairs. If people get injured in the accident, the business auto insurance will pay the expenses as well.
- Goods In-Transit Coverage - You may want to include this coverage if your business involves transporting materials, clothing, or equipment outside of your store premises. For example, if you're taking your stock directly to customers or exhibiting clothing in a fashion show, you may need goods in-transit insurance. While the policy can provide protection against damage, theft, or loss of items in transit, it isn't required if you utilize a separate courier to handle deliveries - in this case, they need to provide their own insurance.
- Umbrella Insurance - While general liability is essential in protecting your business from potential risks and loss associated with an apparel shop, it is not always enough to cover damages. There are coverage limits for all liability policies for your apparel store. Umbrella liability insurance can be a smart way to increase your limits of liability for all of the risks under one policy that will protect your store in case of claims which exceed your primary policy limits.
- Business Interruption Insurance - The apparel industry can be notoriously seasonal. This seasonality is even a bit more pronounced for up-scale clothing boutiques. This policy is designed to cover the losses suffered if circumstances beyond your control cause your business to be unable to trade at full-capacity. While some commercial property damage insurance covers contain a business interruption component, there are many that do not; as an apparel boutique owner, ensure that your policy contains such a provision.
- Crime Insurance - Purchasing comprehensive crime insurance coverage can help mitigate against the loss of business merchandise or money as a result of theft or robbery. It can cover cash inside and outside cash registers and safes - and money in-transit to and from banks. Help your business cover those kinds of losses, in addition to losses from shoplifting, by obtaining crime insurance.
- Employee Dishonesty Insurance - You can also buy employee dishonesty insurance. This can help protect against any financial risk or loss you experience because of the fraudulent activities of your employees, like stealing.
What Are Clothing Stores Risks & Exposures
Premises liability exposure comes from slips and falls due to public access to the premises. Floor covering 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. 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.
Personal injury exposures are from dressing rooms, which must be well maintained with privacy carefully guarded, and from apprehending and detaining shoplifters. Shoplifting procedures must be fully understood and utilized by all employees.
Products liability exposure is normally low. Direct importing of clothes and tailoring can add to the exposure. Foreign-made items should come from a domestic-based wholesaler. Any direct importer should be considered as a product manufacturer.
Workers compensation exposure is from lifting which can cause back injury, hernias, sprains, strains, and also from slips and falls. Employees should be provided with safety equipment and be trained on proper handling techniques. If tailoring services are offered, injuries due to sewing and cutting are possible. In any retail business, hold-ups may occur. Employees should be trained to respond in a prescribed manner.
Property exposures are low since ignition sources are limited to electrical wiring and heating and cooling systems. These should be maintained and meet current codes for the occupancy. Should a fire occur, the clothing provides a combustible fire load that is highly susceptible to water and smoke damage.
Individual items may be shoplifted. High-value or designer items may be stolen in larger quantities after hours. Appropriate security measures should be in place, 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 exposures are generally low as backup facilities are readily available.
Crime exposures are from employee dishonesty and theft of money and securities either from holdup or safe burglary. Background checks should be conducted on all employees handling money. There must be separation of duties between persons handling deposits and disbursements and handling bank reconciliations. 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, and valuable papers and records due to customers' and vendors' records. Backup copies of all records, including computer records, should be made and stored off premises. If the store alters or repairs items for customers, there will be a bailees exposure. There may be goods in transit between stores or if the store delivers items.
Business auto exposure is generally limited to hired and non-owned for employees running errands. If the store delivers items to customers, anyone who drives an insured vehicle must have a valid license and acceptable MVR. Vehicles must be regularly maintained with records kept.
What Does Clothing Store Insurance Cover & Pay For?
Clothing stores can be sued for a variety of reasons, including:
- Slip and Fall Accidents: If a customer slips, trips or falls inside a store due to a wet or slippery floor, uneven surfaces or any other dangerous conditions, the clothing store can be sued.
- Product Liability: If a customer is injured or suffers harm due to a defective product, the store can be held liable. This can include anything from clothing with sharp edges or choking hazards to clothing that catches fire easily.
- Discrimination: Clothing stores can also be sued for discrimination if they treat customers or employees unfairly based on race, gender, age, religion or disability.
- Copyright Infringement: Clothing stores can be sued if they use copyrighted designs or logos without permission.
Insurance can help protect clothing stores from these types of lawsuits. Here's how:
General Liability Insurance: This insurance can help pay for legal expenses, medical expenses, and other damages if a customer is injured in a slip and fall accident in the store.
Product Liability Insurance: This insurance can help pay for legal fees, settlements, and judgments if a customer is injured or harmed by a defective product sold by the clothing store.
Employment Practices Liability Insurance: This insurance can help pay for legal expenses if the store is sued for discrimination by an employee or customer.
Intellectual Property Insurance: This insurance can help pay for legal fees and damages if the store is sued for copyright infringement.
In conclusion, clothing stores can be sued for various reasons, but having the right insurance coverage can help protect them from the financial impact of lawsuits.
Commercial Insurance And Business Industry Classification
- SIC CODE: 2311 Men's and Boys' Suits, Coats, and Overcoats, 5611 Men's and Boys' Clothing Stores, 5621 Women's Clothing Stores, 5632 Women's Accessory and Specialty Stores, 5641 Children's and Infants' Wear, 5651 Family Clothing Stores
- NAICS CODE: 48110 Men's Clothing Stores, 448120 Women's Clothing Stores, 448130 Children's and Infants' Clothing Stores, 448140 Family Clothing Stores, 448150 Clothing Accessories Stores, 448190 Other Clothing Stores
- Suggested Workers Compensation Code(s): 8008 Store - Clothing, Wearing Apparel, or Dry Goods - Retail
Description for 2311: Men's and Boys' Suits, Coats, and Overcoats
Division D: Manufacturing | Major Group 23: Apparel And Other Finished Products Made From Fabrics And Similar Materials | Industry Group 231: Men's And Boys' Suits, Coats, And Overcoats
2311 Men's and Boys' Suits, Coats, and Overcoats Establishments primarily engaged in manufacturing men's and boys' tailored suits, coats, and overcoats from purchased woven or knit fabrics. Establishments primarily engaged in manufacturing uniforms (except athletic and work uniforms) are also included in this industry.
- Coats tailored: men's and boys'
- Firefighters'dress uniforms men's
- Formal jackets, men's and boys'
- Jackets, tailored suit-type: men's and boys'
- Military uniforms, tailored: men's and boys'
- Overcoats: men's and boys'
- Police uniforms men's
- Suits, tailored: men's and boys'
- Tailored dress and sport coats: men's and boys'
- Topcoats: men's and boys'
- Uniforms, tailored: men's and boys'
- Vests, tailored: men's and boys'
Description for 5611: Men's and Boys' Clothing Stores
Division G: Retail Trade | Major Group 56: Apparel And Accessory Stores | Industry Group 561: Men's And Boys' Clothing And Accessory Stores
5611 Men's and Boys' Clothing and Accessory Stores: Establishments primarily engaged in the retail sale of men's and boys' ready-to-wear clothing and accessories.
- Apparel accessory stores, men's and boys'-retail
- Clothing stores, men's and boys'-retail
- Haberdashery stores-retail
- Hat stores, men's and boys'-retail
- Men's wearing apparel-retail
- Tie shops-retail
Description for 5621: Women's Clothing Stores
Division G: Retail Trade | Major Group 56: Apparel And Accessory Stores | Industry Group 562: Women's Clothing Stores
5621 Women's Clothing Stores: Establishments primarily engaged in the retail sale of a general line of women's ready-to-wear clothing. This industry also includes establishments primarily engaged in the specialized retail sale of women's coats, suits, and dresses.
- Bridal shops, except custom-retail
- Clothing, ready-to-wear: women's-retail
- Dress shops-retail
- Maternity shops-retail
- Ready-to-wear stores, women's-retail
Description for 5632 Women's Accessory and Specialty Stores
Division G: Retail Trade | Major Group 56: Apparel And Accessory Stores | Industry Group 563: Women's Accessory And Specialty Stores
5632 Women's Accessory and Specialty Stores: Establishments primarily engaged in the retail sale of women's clothing accessories and specialties, such as millinery, blouses, foundation garments, lingerie, hosiery, costume jewelry, gloves, handbags, and furs (including custom made furs).
- Apparel accessory stores, women's-retail
- Blouse stores-retail
- Costume jewelry stores-retail
- Foundation garments-retail
- Fur apparel made to custom order-retail
- Fur shops-retail
- Handbag stores-retail
- Hosiery stores-retail
- Lingerie stores-retail
- Millinery stores-retail
Description for 5641: Children's and Infants' Wear
Division G: Retail Trade | Major Group 56: Apparel And Accessory Stores | Industry Group 564: Children's And Infants' Wear Stores
5641 Children's and Infants' Wear Stores: Establishments primarily engaged in the retail sale of children's and infants'clothing, furnishings, and accessories. Such establishments may specialize in either children's or infants' wear or they may sell a combination of children's and infants' wear.
- Children's wear stores-retail
- Infants'wear stores-retail
Description for 5651: Family Clothing Stores
Division G: Retail Trade | Major Group 56: Apparel And Accessory Stores | Industry Group 565: Family Clothing Stores
5651 Family Clothing Stores| Establishments primarily engaged in the retail sale of clothing, furnishings, and accessories for men, women, and children, without specializing in sales for an individual sex or age group.
- Family clothing stores-retail
- Jeans stores-retail
- Unisex clothing stores-retail
Clothing Store Insurance - The Bottom Line
To identify the risks of your shop, you can simply consult with an insurance professional or even an attorney. The risks for such a business can be very wide owing to the several different exposures involved with the business activities. Before you pay costly fees for advice from an attorney, we can at least assist you to identify some of the potential claims which could arise and ways your clothing store insurance coverage can protect you in the event of an insurance claim.
If it has been your true passion to run a clothing store, do not put it at risk by not picking the right types of business insurance. Make sure that you protect your hard earned cash with clothing store insurance which will cover the risks you are exposed to.
Additional Resources For 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
- Specialty Retail Stores
The retail industry is a vital sector of the economy, providing goods and services to consumers across the globe. It is also a sector that is constantly evolving, with new technologies and trends emerging on a regular basis.
Despite its importance, the retail industry is not without its risks. Retail businesses face a variety of threats, including theft, damage to property, and liability issues. These risks can have significant financial consequences for retail businesses, which is why commercial insurance is so important.
Insurance can provide retailers with protection against financial loss resulting from unforeseen events. For example, if a retail store is damaged by a natural disaster, insurance can help cover the cost of repairs and help the business get back on its feet. Similarly, if a retail employee is injured on the job, insurance can help cover their medical expenses and any lost wages.
In addition to protecting against financial loss, commercial insurance can also help retail businesses protect their reputation. If a retail business is sued or faces other legal challenges, insurance can provide financial support and legal representation. This can help to protect the business's reputation and maintain customer trust.
Overall, insurance is an essential component of a successful retail business. It helps to safeguard against financial loss and protect against potential legal challenges, which can be especially important for smaller businesses that may not have the resources to absorb these types of losses.
By investing in business insurance, retail businesses can ensure that they are well-equipped to handle the many challenges that come with operating in this dynamic industry.
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.