Rent To Own Store Insurance Policy Information
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 rent to own store insurance might be needed? Read on to discover more.
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.
Below are some answers to commonly asked rent-to-own store insurance questions:
- What Is Rent To Own Store Insurance?
- How Much Does Rent To Own Store Insurance Cost?
- Why Do Rent To Own Stores Need Insurance?
- What Type Of Insurance Do Rent To Own Stores Need?
- What Does Rent To Own Store Insurance Cover & Pay For?
What Is Rent To Own Store Insurance?
Rent-to-Own store insurance is a type of insurance policy that provides protection to Rent-to-Own stores that offer customers the option to rent products such as appliances, electronics, furniture, and other household items for a specified period of time with the option to purchase the product at the end of the rental agreement.
This type of insurance covers the store's inventory and property from damage, theft, or loss, as well as liability for any accidents that may occur on the store's premises. It also covers any legal expenses associated with claims made against the store.
The goal of Rent-to-Own store insurance is to provide financial protection to the store in case of any unforeseen events or losses, thereby minimizing the impact on the business's bottom line.
How Much Does Rent To Own Store Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small rent-to-own stores ranges from $47 to $69 per month based on location, size, revenue, claims history and more.
Why Do 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 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 rent to own store insurance you can is so essential.
What Type Of Insurance Do 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 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 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 rent to own store insurance policies. Because your insurance needs may be more extensive, it is imperative to consult a skilled commercial insurance broker.
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.
What Does Rent To Own Store Insurance Cover & Pay For?
Rent-to-own stores are retail establishments that offer consumers the option to lease furniture, appliances, electronics, and other items with the option to buy at the end of the lease term. However, these types of stores are not without risks and may face lawsuits for a variety of reasons. Some of the reasons rent-to-own stores may be sued include:
Consumer complaints: Rent-to-own stores may face lawsuits from customers who claim they were misled or taken advantage of in some way. For example, a customer may claim that the store did not disclose the total cost of the item or the interest rate on the lease agreement.
In this case, a General Liability insurance policy may protect the store from lawsuits by covering legal costs associated with defending against the claim. This type of insurance can help pay for attorneys' fees, court costs, and settlements or judgments if the store is found liable.
Product liability: Rent-to-own stores may also be sued if a product they lease or sell causes harm or injury to a customer. For example, if a faulty appliance catches fire and damages a customer's home, the store may be held liable.
In this case, a Product Liability insurance policy may protect the store by covering legal costs associated with defending against the claim. This type of insurance can help pay for attorneys' fees, court costs, and settlements or judgments if the store is found liable.
Property damage: Rent-to-own stores may be sued if they damage a customer's property during the delivery or installation of leased items. For example, if a delivery truck damages a customer's driveway or lawn, the customer may sue the store for damages.
In this case, a Commercial Auto insurance policy may protect the store by covering legal costs associated with defending against the claim. This type of insurance can help pay for attorneys' fees, court costs, and settlements or judgments if the store is found liable.
Employee injuries: Rent-to-own stores may be sued by employees who are injured on the job. For example, an employee who is injured while lifting heavy furniture may sue the store for medical expenses and lost wages.
In this case, a Workers' Compensation insurance policy may protect the store by covering the employee's medical expenses and lost wages. This type of insurance can also help pay for legal costs associated with defending against the claim if the employee decides to sue the store for additional damages.
Overall, insurance can help protect rent-to-own stores from a variety of lawsuits by providing financial support to cover legal costs, settlements, or judgments. However, it's important for store owners to review their insurance policies regularly to ensure they have adequate coverage for their business needs.
Commercial Insurance And Business Industry Classification
- SIC CODE: 5712 Furniture Stores, 5722 Household Appliance Stores
- NAICS CODE: 442110 Furniture Stores, 443141 Household Appliance Stores
- Suggested Workers Compensation Code(s): 8044 Store - Furniture & Drivers
Description for 5712: Furniture Stores
Division G: Retail Trade | Major Group 57: Home Furniture, Furnishings, And Equipment Stores | Industry Group 571: Home Furniture And Furnishings Stores
5712 Furniture Stores: Establishments primarily engaged in the retail sale of household furniture. These stores may also sell home furnishings, major appliances, and floor coverings.
- Beds and springs-retail
- Cabinet work on a custom basis to individual order-retail
- Cabinets, kitchen: not built in-retail
- Furniture, custom made-retail
- Furniture, household, with or without furnishings and appliances-retail
- Juvenile furniture-retail
- Mattress stores, including custom made-retail
- Outdoor furniture-retail
Description for 5722: Household Appliance Stores
Division G: Retail Trade | Major Group 57: Home Furniture, Furnishings, And Equipment Stores | Industry Group 572: Household Appliance Stores
5722 Household Appliance Stores: Establishments primarily engaged in the retail sale of electric and gas refrigerators, stoves, and other household appliances, such as electric irons, percolators, hot plates, and vacuum cleaners. Many such stores also sell radio and television sets. Retail stores operated by public utility companies and primarily engaged in the sale of electric and gas appliances for household use are classified in this industry.
- Air-conditioning room units, self-contained-retail
- Electric household appliance stores-retail
- Freezers, household-retail
- Garbage disposers, electric-retail
- Household appliance stores, electric or gas-retail
- Kitchens, complete (sinks, cabinets etc.)-retail
- Ranges, gas and electric-retail
- Refrigerators and related electric and gas appliances-retail
- Sewing machine stores-retail
- Stoves and related electric and gas appliances-retail
- Vacuum cleaner stores-retail
Rent To Own Store Insurance - The Bottom Line
To learn more about the specific types of 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.
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
- 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.