There are a number of different types of used merchandise stores. These can range from thrift stores and flea markets to antique shops and furniture stores. If you own a store that sells used merchandise, you will want to be sure to protect your investment with a suitable commercial insurance policy that has been custom-built to meet your business’s specific coverage needs.
2014 Used Goods Industry Facts From IBISWorld
- There are more than 73,000 used goods shops operating in the United States.
- These stores employ more than 237,000 people.
- The used merchandise industry is responsible for about $15 billion in revenue each year.
Why Used Merchandise Stores Need Comprehensive Insurance Coverage
Used goods store owners, like owners of any retail establishment, need to purchase commercial insurance. This insurance protects their businesses from the financial losses that can occur as a result of a liability lawsuit, or property loss and damage.
You should keep in mind a number of different factors when purchasing commercial insurance. Independent insurance agents can help you recognize your business’s specific risks and can work with a number of insurance companies to build a policy that is right for your used goods store.
Purchasing Thrift Store or Flea Market Insurance
Thrift stores tend to deal with lower-value, often donated items. Thrift store insurance ensures that in the event of a disaster, the business will be able to rebuild and reopen. The main insurance risk when considering a thrift store insurance package is that of liability. If someone is injured because of an accident while in your retail establishment or because of a faulty or previously recalled item that you sold them, they may decide to sue your business. General liability insurance is likely to cover your court costs, legal defense fees and assigned damages, if any.
Flea markets, on the other hand, include a lot of different vendors in one large space. As the host of a flea market event, your business does not actually own any of the merchandise being sold, but it may be held responsible for providing a safe marketspace for its sale. If you run a flea market venue, you can protect yourself a bit through indemnity clauses in the vendors’ lease agreements, but it is also a good idea to discuss the particulars of your business with an experienced insurance agent, who can help you cover your potential exposures with a suitable flea market insurance plan.
Purchasing Thrift Store & Furniture Store Insurance
Thrift stores and furniture stores present slightly more complex insurance coverage needs. This is because the merchandise in the store is owned by someone else, but is in your care, custody and control. The property insurance portion of your business insurance policy will provide coverage for your cash registers, shelving and other store-owned property, but to get coverage for the merchandise itself, you may need to purchase bailee insurance.
In addition, your thrift store or used furniture store insurance policy will include general liability coverage to protect your business from potential lawsuits, such as may occur if a customer sustains an injury while in your retail space.
Purchasing Antique Store Insurance
Antique store insurance is the most complex of the coverage for the used merchandise industry. This is because your antique store deals with fine arts, so you may frequently have highly valuable items in your possession. A policy that offers only replacement cost value to your property is not sufficient as replacing an ornately detailed 200-year-old antique buffet table, for example, with a new one from a home furnishing store will not compensate you with the actual value of your loss.
Heirlooms, collectibles and antique jewelry may have a very high retail price due to their artistic value. It is important that you have these items appraised by a qualified professional and that you keep copies of these reports in a safe place as you will most likely need them if you submit an insurance claim. You may need to purchase special riders or even an inland marine insurance policy to adequately insure these items. Your independent insurance agent can provide you with guidance on properly covering your inventory with your antique dealer insurance policy.
Also, keep in mind that because inventories at antique stores can vary significantly from month to month, you may want to ask your insurance agent about purchasing coverage on a reporting basis. Some insurance companies will permit you to submit monthly reports of the value of your inventory and will adjust your rates accordingly. There are pros and cons to having this type of coverage, so be sure that your insurance agent explains this coverage in full before you decide whether it makes sense for your antique store business.
What Other Insurance Do Used Merchandise Stores Require?
In addition to the property and liability coverage mentioned above, there are other insurance coverage types that your used goods store may require or benefit from. These include
- Business Income Insurance: This coverage provides your used merchandise store with a continuation of income in the event that a covered event forces you to close shop for an extended period. This coverage typically lasts until you are able to resume normal business operations, up to one year.
- Workers' Compensation Insurance: Most states require employers to purchase workers' compensation insurance, which provides coverage for the medical treatment of injuries sustained on the job.
- Flood Insurance: Business insurance policies rarely include coverage for damage caused by floods. Because floodwaters can cause extensive damage, it is important that you look into supplementing your policy with commercial flood insurance through the NFIP. Your independent insurance agent can help you do this.
There are additional types of insurance that may be a good fit for your specific business. By discussing the ins-and-outs of your particular business, you can help your independent insurance agent determine your various exposures. Your agent can then help you find the right coverage to mitigate those risks.
Get Help Building a Strong Insurance Policy for Your Used Merchandise Store
Purchasing business insurance for your used goods store does not need to be a complex process. Allow an independent agent in the Trusted Choice® network to guide you as you make your coverage decisions. These agents can work with a variety of insurance companies to find competitively priced policies that provide the coverage you need. Find a Trusted Choice agent near you to learn more about thrift store, flea market, consignment store or antique shop insurance.