Whether geared toward providing apparel for women, men, children or families, clothing stores are a staple throughout the United States. As the owner of a clothing store, you have likely invested a lot of time, money and effort into opening your business. Be sure to protect that investment with a comprehensive commercial insurance portfolio that is designed specifically for your apparel store. An independent insurance agent can show you how.
2014 Clothing Store Industry Facts From IBISWorld
- According to recent statistics, there are currently 73,459 clothing stores operating in the U.S.
- 9,242 are men’s clothing stores.
- 33,189 are women’s clothing stores.
- 9,507 are children’s clothing stores.
- 21,521 are family clothing stores.
- These stores employ approximately 1.3 million people.
- The clothing store industry generates about $170 billion in revenue each year.
What Could Go Wrong at a Clothing Store?
While major, financially devastating incidents at clothing stores are rare, they do happen. It is therefore important that you have the right insurance coverage in place to protect your business if something should go wrong. For example, without insurance, how would your clothing store be able to cope financially with the following scenarios?
- A customer falls while trying on clothes in your fitting room. The fall results in a broken hip that requires surgery and months of physical therapy afterward. The customer sues your store.
- A fire in a neighboring store spreads to your own. While only a small portion of your inventory is burned, it all smells like smoke and cannot be sold.
- An employee claims to have been held back from a promotion due to discriminatory practices and files a lawsuit against your clothing store. While you believe that the claim holds no merit, you must still retain the services of a lawyer for your legal defense and the costs begin to add up.
Cover Your Clothing Store With Property Insurance
Your business property, including your apparel inventory, is likely your clothing store’s biggest asset. It is crucial that you have sufficient coverage to receive appropriate compensation in the event of a total loss.
- Building insurance: This is typically only necessary if you own the building in which your clothing store is situated. This insurance provides compensation for damage to the structure of your building. A typical policy covers damage caused by such things as lightning, hail, wind, fire and vandalism.
- Property insurance: This insurance provides coverage for all the business-owned property you keep in your store, such as inventory, garment racks, shelving, signage, mannequins, cash registers and shopping carts. If you keep stock in a separate warehouse, you will need to be sure to purchase coverage for that inventory as well.
- Flood insurance: Commercial insurance policies nearly always exclude coverage for damage caused by flooding. If your store is at risk, you should talk to your independent insurance agent about supplementing your coverage with a commercial flood insurance policy through the NFIP (National Flood Insurance Program).
- Backup of sewers and drains insurance: Not all flood damage is caused by floods. If your clothing store is located at or below ground level, you may be at risk for damage caused by backed up sewers or drains. This insurance also provides coverage for flooding caused by sump pump failure, such as might happen in the event of an extended power outage.
The Right Liability Insurance Can Protect Your Clothing Store
A liability lawsuit can happen at any time. Regardless of whether or not your business is actually at fault, anyone can file a lawsuit if they feel wronged, and it will cost you money to defend your clothing store. Liability insurance protects your business from large financial losses if it is sued; the protection includes compensation for court costs, legal fees and financial damages. The types of liability insurance that may be of interest to you include:
- Premises insurance: This provides coverage if someone is injured or experiences property damage while in your clothing store. This is particularly important because customers at clothing stores tend to linger when shopping.
- Product insurance: If a customer is injured or sickened by a product you sell in your store, your business may be named in a liability lawsuit. This insurance provides coverage.
- Employment practices liability insurance (EPLI): This covers your clothing store if an employee accuses your business of engaging in an illegal employment practice, such as wrongful termination, sexual harassment or discrimination.
- Cyber liability insurance: This is a relatively new type of insurance. It protects your business from financial losses if a hacker breaks into your computer system, or installs a skimmer on your credit card reader and steals your customers’ personal or financial data.
What Other Insurance Coverage Do You Need for Your Clothing Store?
In addition to the property and liability coverage mentioned above, there are other insurance coverage types that may be worth discussing with your independent insurance agent. These include:
- Business income insurance: This provides your clothing store with a continuation of income if it must shut down for an extended period due to a covered event. This continuation of business income enables you to continue to pay monthly bills and employee salaries until normal operations resume.
- Workers’ compensation insurance: Required in most states, workers’ compensation insurance covers medical treatment for injuries sustained by employees while on the job. One of the benefits of this insurance is that it can significantly reduce your chances of facing a lawsuit related to the accident.
- 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.
Get Help Building a Strong Apparel Store Insurance Portfolio
Ensuring that you are buying suitable insurance coverage for your clothing store can be a complex process, especially if you are buying business insurance for the first time. This is why it is beneficial to speak with an independent insurance agent in the Trusted Choice® network. These agents can help you determine your exposures and can then shop around for competitively priced coverage that meets your coverage needs. Find a Trusted Choice agent near you to learn more about finding the right insurance for your clothing store.