Consignment Store Insurance

Consignment stores are growing in popularity as people learn that there’s really not a big difference between a brand new and a gently used item. An independent insurance agent can shop for the best business insurance for you in a similar way that you shop for your store's items.

Independent insurance agents know the ins and outs of business insurance and have an understanding of the insurance needs that your business faces in your local area. Plus, they like options and will provide you with a handful of comprehensive insurance packages to choose from. But first, let's dive deeper into the type of insurance your consignment store might need.

Important Consignment Store Statistics

• Consignment stores have seen 7% growth yearly over last two years
• There are currently more than 25,000 resale, consignment, and not-for-profit stores in the US
• 12% to 15% of Americans shop at consignment stores every year

Why Does a Consignment Store Need Insurance

If you have a building, property, products, and people working under you, then you need insurance. Insurance is designed to protect a business’s assets.

Consider what would happen to your business and your finances if any of the following occurred:

• A fire burns down your store along with all the products inside
• A customer slips and falls in your parking lot and sues you
• Someone breaks into your store and steals all of your items
• A pipe breaks inside your building and causes you to close your doors for several months
• A shelf collapses in the store and severely injures a shopping client

Protect Your Clothing Store with Good Property Insurance

Half of the fun of buying secondhand items is shopping. People have made careers out of teaching others how to shop thrift stores and consignment shops, which is why you need great property insurance to protect the building that houses your products. In the event of a loss, the following property insurance will assure you receive proper compensation.

• Building insurance: This insurance pays for any damage that is done to the structure of your building as a result of natural disasters or vandalism. However, this is only necessary if you own your building. If you’re leasing or renting, then the owner of the building should have this insurance.
• Property insurance: Any business-owned property inside your store is covered under property insurance. For a consignment store, this can include inventory, racks, shelving, signs, mannequins, registers, and shopping carts.
• Flood insurance: Flooding as a result of an environmental storm is rarely covered in commercial insurance. If your store is located somewhere prone to this type of weather, then it’s recommended that you purchase flood insurance.
• Backup of sewers and drains insurance: Flood damage can occur in a variety of ways. If your store floods as a result of backed up sewers or drains or pump failures, this insurance will cover you in those situations.

Consignment Stores Need Proper Liability Insurance

Running a business without liability insurance is a risky move that usually doesn’t end in the business owner's favor. Anyone can file a lawsuit at any time, and general liability insurance can protect your business against the following:

• Bodily injury
• Property damage
• Medical payments
• Court costs and legal fees
• Personal and advertising injury

The following liability insurance could be beneficial to your consignment store:

• Premises insurance: If a shopper is injured or experiences property damage while inside your consignment store, premises insurance will cover the costs.
• Product insurance: Depending on the type of products you sell, there’s a chance a customer could be injured by one of your products. If this happens, product insurance steps in.
• Employment practices liability insurance (EPLI): This covers your consignment store if an employee accuses your business of engaging in illegal employment practice, such as wrongful termination, sexual harassment, or discrimination.
• Cyber liability insurance: With the world going in a technology-first direction, this insurance protects your business if a hacker breaks into your computer system and steals valuable customer information.

Additional Insurance Options for Consignment Stores

Property and liability insurance is the main concern for any retail business, but there are a variety of additional insurance options that can protect your consignment store.

When working with your insurance agent on your coverage, consider the following options:

• Business income insurance: Should your consignment store have to shut its doors for several weeks or months, this insurance will provide a continuation of income so you can continue to pay bills and employee salaries.
• Workers’ compensation insurance: Most states require that you provide protection for your employees should they get hurt on the job. This is referred to as workers’ compensation. It not only covers medical treatment but can also reduce your chances of a lawsuit.
• Employee dishonesty insurance: We all want to think that we make good hiring decisions, but sometimes employees engage in dishonest practices, such as stealing, embezzling, or other illegal actions while in your employ. This insurance shields your clothing store from financial losses incurred because of such an employee’s actions.
• Auto liability insurance: If your consignment store has any vehicles that are used for business purposes, they need to be insured under a commercial auto policy. This could be for moving furniture or items from a warehouse, or simple business-related errands.
• Health Insurance: If your business has at least 50 full-time employees, you are required to provide them with health insurance.

How Much Does Consignment Insurance Cost

A variety of factors go into how much your consignment store insurance will be. On average, premiums fall between $500 and $1,000 a year, but every store will vary.

The most common factors that affect the cost of consignment store insurance include:

• The size of your business
• The weather and crime risks in the city where your store is located
• The value of your inventory and other business property
• The number of workers you employ
• Whether you offer additional services like delivery and installation
• The types of business insurance coverage you are purchasing
• How high you need your coverage limits to be
• Your store’s claims history

A local independent insurance agent can obtain a variety of customized quotes on your behalf. That way, you can be sure that the policies you select are offered to you at a reasonable price.

How to Find the Best Insurance for Your Consignment Store

Building your consignment store insurance portfolio doesn’t need to feel overwhelming. An independent insurance agent’s role is to do the hard work for you.

They’ll explain the different policies and help you determine what will fit your business. When the time comes to file a claim, your agent will be right there to help guide you through every last step and get your life back to where it all was. How great is that?

Why Online Quotes Aren’t Always the Best Way to Shop

Getting your insurance quotes online can be tempting. Sure, it’s fast and easy. But are the quotes you are getting actually accurate? And are you getting quotes for all the different types of coverage your business needs?

Online quotes cannot give you the whole picture. They often leave out important coverage, which may result in you being unable to get compensation if something disastrous happens. And they can leave out cost-saving opportunities such as discounts and bundling opportunities that an independent agent can help you take advantage of. 

Instead of getting an online quote, find an independent insurance agent near you, and schedule a one-on-one consultation to discuss your options for the best coverage for your particular consignment store. 

Benefits of an Independent Insurance Agent

Independent insurance agents have access to multiple insurance companies, ultimately finding you the best coverage, accessibility, and competitive pricing while working for you. Find an independent insurance agent in your community here.