Owning a costume store can be a fun and rewarding experience. But before the fun and games can begin, you need to make sure you’ve protected your investment and your livelihood with a comprehensive set of business insurance policies that are tailored to your unique risks.
Costume store owners can face devastating costs if some type of unexpected event—like a fire, a tornado, or lightning—damages their shop. What’s more, any kind of retail establishment is particularly susceptible to slips, trips, and falls in the store that can lead to expensive medical bills and lawsuits that have to be paid for the injured party.
With the right costume store insurance, you can sleep easy knowing that your business is protected. An independent insurance agent can help you find insurance companies and policies that specialize in your line of work, so you can be assured that your coverage matches your risks.
Why Do I Need Costume Store Insurance?
Like any retailer or shop owner, the potential for property damage is endless. Your store can catch fire, damaging everything inside including inventory, furniture, fixtures, computers, and important files.
A severe storm can send a tree through your storefront window. Or a lightning strike can zap all of your computers and electronics rendering them useless.
What’s more, anyone who shops or has business on your premises can be injured. A customer could trip on an upturned rug and break an ankle, or an employee collecting shopping carts in the parking lot could damage a customer’s car.
In these and many other circumstances, you’d likely be responsible for paying for related medical expenses or repair costs.
If you make custom costumes for theater productions or special events, you have additional liability risks. Imagine if you fail to properly fulfill an order for a theater production, whether it’s a high school play or a major Broadway musical. Trying to put on a show without appropriate costuming would be a major disaster for the production.
If you’re responsible for the failure, reputational harm, and financial losses that result for the theater company, you are likely to be sued for damages. You’ll need an attorney to defend you, and you’ll need to find a way to pay a financial settlement.
In addition, you'll need costume store insurance for situations such as:
- Inventory damage due to careless shoppers or vandalism
- Loss of income due to a catastrophic or unexpected event (a fire damages part of your store, forcing you to close while repairs are made)
- Shoplifting and employee theft of cash or inventory
- Selling faulty products (improperly labeled products that present a child choking hazard or allergy hazard)
- Employee injuries (falling off a ladder, back injury due to heavy lifting, etc.)
- Employee lawsuits related to discrimination or other claims
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What Does Costume Store Insurance Cover?
You’ll need several types of insurance to fully cover your costume store.
Liability insurance pays for injuries or damages to third parties that are caused on your premises or as a result of purchasing something at your store.
If, for example, a customer trips over a step stool while trying on a costume, your commercial general liability (CGL) policy would pay for any resulting medical bills if the person were injured.
Your CGL policy would also respond in the case we mentioned above where you failed to properly fulfill a custom costume order for a theater production. Even if the circumstances that lead to the failed order were out of your control, you can still be sued. And it costs a lot of money to respond to any lawsuit—negligent or not.
Your CGL policy also pays in cases of product liability, advertising liability, slander, and libel. That means that if one of your costumes included a hood with a string that created a choking hazard and a child was injured or killed, your CGL policy would likely respond and pay for any medical expenses, as well as any expenses related to a resulting lawsuit.
Or if an employee posted a false statement about a competitor on your Facebook page resulting in lost income for the competitor, you could be sued for financial damages. Your CGL policy would be your lifeline, paying for attorney fees, court costs, and any settlements or court-ordered judgments paid out to the injured party.
Commercial property insurance is also essential for any costume store owners. It protects you from events like fires, burglaries, and natural disasters. It covers the cost of replacing damaged inventory and other physical assets, making repairs to your structure, and more.
Remember that if you open seasonal pop-up costume stores for the busy Halloween season, you’ll need coverage for all of your locations, including brick and mortar stores, kiosks, tents, and anywhere else you sell costumes.
Commercial property policies generally include business interruption insurance. This covers lost income and pays for certain ongoing expenses if you must temporarily close your shop while you make repairs after a covered event.
Other Essential Coverage for Costume Stores
You’ll probably need additional endorsements (add-ons) to your costume store business insurance policies. You may need one or more additional stand-alone policies that offer coverage for situations that are excluded from coverage or that are not sufficiently covered under your basic property and liability policies.
- Commercial umbrella insurance provides excess liability protection to any of several other policies you might have. If a customer injury in your store leads to an expensive lawsuit that exceeds the limits of your commercial general liability policy, your commercial umbrella policy kicks in with higher coverage limits.
- Commercial auto insurance ensures that you’ll be able to pay for any physical damage or injuries you cause if you are in an auto accident while driving for business purposes. If you own a fleet of commercial vehicles, or you simply drive a personal vehicle for business purposes, you'll need some kind of commercial auto insurance. Commercial auto insurance is customized to cover your specific vehicles and drivers.
- Workers’ compensation insurance is typically required for any business that has employees. It pays for lost income and medical expenses for employees that are injured on the job. Your costume shop workers could be injured while stocking shelves, opening boxes with a sharp box cutter, or using repetitive motion at the cash register.
- Sign coverage pays for damage to outdoor signs that are not attached to your building when the damage is caused by weather, vandalism, fire, etc.
- Utility interruption coverage provides income protection if you are unable to operate due to a covered utility (water, electrical) interruption.
- Employment practices liability insurance covers you if an employee sues you for discriminatory employment practices.
Don’t Forget About Crime Coverage
One of the most significant threats to your business is theft of inventory or cash. Nearly every retail store is likely to be the victim of a shoplifter at some point. What’s more, employees all too often steal property, money, and securities owned by their employers.
Even a small cash theft can be difficult to overcome for a small business. Luckily, crime coverage protects your business from vandalism, shoplifting, and employee theft and dishonesty.
It can be purchased as a standalone policy or as an endorsement on another business insurance policy. It covers things like vandalism, theft, and shoplifting, as well as employee acts like forgery, alteration, unauthorized electronic funds transfers, credit card fraud, and more.
How Much Does Costume Store Insurance Cost?
The cost to cover your costume shop with a comprehensive business insurance program will vary depending on:
- the size of your store
- the number of store locations and where the stores are located
- the number of employees you have
- the types of products you sell
- the value of your inventory
- the types of coverage and the coverage limits that you require
- the crime and weather risk in your city
Find and Compare Quotes
An independent insurance agent can work with you one-on-one to determine the types and amounts of coverage you need. Your agent can get quotes from multiple insurance companies so you can evaluate the cost and coverage options and make the best choice.
Benefits of an Independent Agent
Our agents simplify the search process for finding the right costume store insurance. They’ll walk you through the handpicked policy options and explain the details and options.
Most importantly, they’ll be there for you when claim time comes. They know the ins and outs of the process and will make sure your claim is handled appropriately.
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The Lowdown on Online Quotes
Online quotes can be tempting. They are fast and easy to get—but are they accurate? And are you getting quotes for the right coverage? For business owners, choosing speed over accuracy can cost you.
Online quotes can’t and don’t see the whole picture. They can leave out important coverage that will leave you devastated if something unexpected happens. And they can leave out cost-saving opportunities that an agent can help you take advantage of.
Instead of getting an online quote, find an independent insurance agent now, and get one-on-one consultation and affordable options for the best coverage for your unique needs.
TrustedChoice.com Article | Reviewed by Paul Martin
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