Getting Comfortable with Insuring Your Furniture Store
Tom Senkus|December 9, 2019
If you own a furniture store, you know that the strength and longevity of your goods is a crucial factor in your success. After all, your customers choose your business for the quality of your goods to spruce up their homes with luxury, comfort, and utility to furnish your livelihood.
But what happens when:
A customer slips and falls in your display area and files a claim against you.
A worker is injured when a forklift malfunctions.
A fire breaks out and damages your landlord’s property.
A delivery truck crashes en route to a customer’s home.
Are you sure your business will be left standing after such an uncomfortable experience? Or will it be crushing to your bottom line, unable to hold up to the weight of circumstances? If you’ve been lucky enough to have an insurance policy in effect, you may be covered against damage; if not, then you could face severe financial penalties.
For these scenarios and other insurance concerns, you’ll want to be sure to protect your furniture store with a suitable small business insurance package. Independent insurance agents can help you build a policy portfolio that protects your furniture store from losses and secures its future with comprehensive coverage designed with your unique needs in mind.
What Types of Insurance Coverage Does Your Furniture Store Need?
As with most businesses, you need insurance. Considering that the average insurance claim is around $15,000 and the average annual cost of insuring a furniture store is around $1,200, having insurance is an obvious decision.
There are lots of insurance coverages to choose from, offered by innumerable insurance companies. Which types of insurance are essential for your furniture store?
Commercial Property Insurance for Furniture Stores
To start, you’ll need property damage insurance for your furniture store. Considering that furniture stores deal in expensive goods and business-related equipment, a single incident can lead to a dramatic loss that could potentially shut your doors. And depending on the severity of the damage, such as a catastrophic fire, even your personal assets may be at risk.
The following are some types of property coverage your independent insurance agent may recommend:
Property insurance: This type of insurance coverage insures the contents of your stores or warehouses against common hazards, including:
Heavy winds and storm damage
As part of most policies for furniture stores, your insurer will reimburse you for items such as:
Your inventory or furniture
Computer and networking systems, flooring
Building insurance: This provides coverage for the structure of the building(s) where your business is located. For furniture stores, this can include:
For those who own these buildings, having insurance is strongly recommended. However, if you’re leasing any of these spaces from a landlord, you may be contractually bound to insure your property with predetermined limits to conduct business.
Optional forms of property insurance include flood insurance and earthquake insurance, which are typically excluded from most policies. Talk to your independent insurance agent about these specific types of coverages to protect your furniture store.
Liability Insurance for Furniture Stores
Liability insurance protects your furniture store against claims made where you’re held responsible for causing injury to another party. Because of this broad definition, liability insurance helps prevent common and unforeseen events that can threaten your business by covering:
In order to get the best liability insurance for your furniture store, consider a commercial general liability insurance policy. This policy normally encompasses most liability insurance types.
You might also consider the following types of additional liability insurance for your furniture store:
Premises liability insurance
Product liability insurance
Advertising liability insurance
Cyber liability insurance
Commercial automobile liability insurance
Workers' Compensation Insurance for Furniture Stores
Nearly every furniture store is staffed by multiple employees and staff members. Due to the nature of the furniture business, employees will engage in heavy lifting and strenuous physical activity. Because of this, injuries are more common for workers in furniture stores than other industries. To help ease the pain of your workers if they are no longer able to work, workers' compensation insurance is necessary for medical treatment, partial income replacement during paid time off, and other health-related concerns.
Unlike other types of insurance, workers' compensation insurance is required by most states. To understand your responsibility when it comes to this type of insurance, speak with an independent insurance agent to determine adequate coverage for your furniture store.
Business Owners Policy
If you’re looking for a comprehensive policy that includes all of the aforementioned insurance types and more, then you may want to talk with an independent insurance agent about a business owners policy (BOP). Essentially, a BOP is a comprehensive package that can be tailored to the unique needs of a furniture store.
The advantages of a BOP policy are what makes it an attractive choice for most furniture store owners. First, you bundle all of your coverages under one insurer, which results in an easier way to handle insurance concerns, such as single-date premium payments and policy changes. Second, insurers value your consolidated insurance concerns, so they’re more apt to offer premium discounts and reduced rates.
Most BOPs for furniture stores group such coverages as property insurance, workers’ compensation, and liability insurance under one policy. Additionally, you’ll gain the ability to elect coverage for business interruption insurance, commercial automobile coverage, crime insurance, and more.
What Is the Cost of Insuring My Furniture Store?
If you’re looking for a definitive cost of insuring your furniture store, the answer is that it depends on a number of factors about your business.
Average Costs of Insurance in the US
First, understand that insurance premiums can range from as low as $300 to as high as $3,000 annually. However, as a ballpark figure, the average premium rate per year is $1,200, which factors to $100 per month. So, protecting your furniture store is more affordable than you may realize.
NAICS Code for Insurance Costs
Next, insurers factor the nature of your business by how it is classified by the government. For each industry and business type, a North American Industry Classification System (NAICS) code is assigned. NAICS codes are responsible for many financially related concerns for business, such as business loans and taxes. In this case, insurers use NAICS codes to determine premium rates.
Businesses have two components in the NAICS code:
The primary NAICS code, a general code that best fits your business.
A secondary code that details the specifics of your business.
Most furniture stores are classified under the primary code of 44, which stands for ‘Retail Trade,’ followed by 2299. According to the official NAICS literature, 442299 is defined an “industry comprises establishments primarily engaged in retailing new home furnishings (except floor coverings, furniture, and window treatments).”
If you don’t know what your company’s NAICS codes are, speaking with an independent insurance agent at TrustedChoice can help you determine which NAICS code your furniture store is classified under.
Risk Factors for Higher Insurance Premiums
Taking into account the NAICS code and average rates, risk factors of your furniture store impact how much your premiums will cost. These include:
Size of premises
Condition of the property
Employment status of employees
Number of employees
Now that you’ve got a firm understanding of how to insure your furniture store and you’re more comfortable with what your business needs to succeed, it’s time to take action. Like furniture, it starts with a firm foundation built from the expertise of an independent insurance agent.
These agents are experienced in helping you identify and assess your various exposures,and will recommend the right kind of coverage to mitigate these risks. An independent agent can help to save you money on insurance by shopping around for competitively priced policies that are the right fit for your furniture business.