Perfume and fragrance shops can be found in many small towns and in most metropolitan shopping malls in the United States. These stores enjoy steady sales and are part of an industry that caters to a consistent demand for quality fragrances. If you have invested your time and money into opening a perfume store, you will want to be sure to protect your investment with a sound business insurance package. Independent agents can help you build a perfume store insurance policy portfolio designed specifically for your retail store.
2014 Perfume and Fragrance Store Industry Facts From IBISWorld
- There are nearly 14,000 perfume and fragrance shops operating in the United States.
- These stores employ approximately 28,400 people.
- The floral industry generates about $5 billion in revenue each year.
What Could Go Wrong at Perfume and Fragrance Stores?
While it may seem that nothing could go wrong at your store, there are times when the unexpected happens and the resultant financial damages can be devastating. For example, how would your business handle the following cases:
- A customer trips in your store and suffers a head injury. Your store is sued for medical treatment costs, lost wages and continued medical care.
- A fire in the shopping mall where your store is located forces your business to close for two months while repairs are made.
- Vandals break into your store and break several perfume bottles and display cases. Carpeting and wall displays are also damaged.
Granted, the risk of a perfume store experiencing a finance-draining scenario, such as those mentioned above, are slim, but just one unexpected event can be enough to destroy your business if you do not have the right insurance coverage. Fortunately, the low-risk nature of your retail establishment will be reflected in lower insurance rates, and you will have an easier time finding an insurance company willing to provide your store with coverage.
Be Sure to Properly Cover Your Perfume Shop’s Property
Much of your perfume store’s equity is likely tied up in inventory and other business property. Insurance can protect your business from irrecoverable losses in the face of a disaster. Some property insurance types that may interest you include the following:
- Building insurance: It is rare for a perfume store to be in a stand-alone, business-owned building, but if you own the structure in which your store is located, you will want to be certain that you have sufficient building insurance to enable you to rebuild if the store is destroyed by a covered disaster, such as a fire.
- Business personal property insurance: This insurance provides coverage for the business-owned property kept inside your store if it is damaged by a covered event, such as heavy winds, fire and vandalism. Business personal property insurance covers your product inventory, display cases, décor, cash registers and other business property. If you rent your retail space and have made renovations to it, be sure to discuss improvements and betterments coverage with your insurance agent as well.
- Peak season coverage: If your perfume store carries a higher volume of inventory at certain times of year, such as in the months leading up to Christmas or Valentine’s Day, you may want to consider peak season coverage, which will allow you to increase your property coverage limits at specific times of year.
Also, because the value of you inventory may change over time, it is a good idea to meet with your agent every three to five years to review your policy limits and make adjustment where necessary.
Your Perfume Shop Needs Liability Insurance
A liability lawsuit can be financially overwhelming. Legal defense fees, court costs and financial damages have the potential to exceed the losses your business can reasonably handle. That is why liability insurance is so important. It provides coverage for the expenses and financial damages associated with a liability lawsuit. But you must be certain you have the right coverage types.
What Other Perfume Store Insurance Coverage Do You Need?
In addition to the property and liability coverage mentioned above, there are other insurance coverage types that may be required or are at least worth considering. They are the following:
- Business income insurance: This coverage provides your perfume store with a continuation of income in the event that a covered disaster forces you to close shop while repairs are made. 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 carry workers’ compensation insurance. This insurance provides coverage for necessary medical treatment following an employee’s work-related injury. It also reduces your perfume shop’s risk of being faced with a liability lawsuit relating to the injury.
- Flood insurance: Flood damage is not covered by commercial insurance policies. Fortunately, you can purchase commercial flood insurance through the National Flood Insurance Program (NFIP). If you rent your retail space, your landlord will be responsible for damage to the building’s structure, so you will only need to buy the contents coverage portion of this insurance plan.
There are several more types of insurance available for businesses, and some may be a good fit for your perfume or fragrance shop. An independent insurance agent can help you determine what your various exposures are and can help you find the right coverage to mitigate those risks.
Get Help Building a Strong Perfume Store Insurance Policy
Building a business insurance portfolio for your perfume or fragrance shop can be a complex process, but it doesn’t need to be. When you work with an independent agent in the Trusted Choice® network, you will have access to an agent who can answer your insurance-related questions and can shop around for the right coverage for your store. Find a Trusted Choice agent near you to get started. Soon you can be comparing quotes for perfume shop insurance policies that are right for your business.