Hobby and toy shops are a staple of American society. Hobby shops provide supplies to those who enjoy creating things including collectible and nostalgic toys; toy stores provide the tools necessary for children’s entertainment and educational development. As the owner of one of these types of stores, you have likely invested a lot of time and money into your business. Be sure to protect it with a well-crafted commercial insurance policy.
2014 Hobby and Toy Shop Industry Facts From IBISWorld
- There are more than 18,500 hobby and toy shops operating in the United States.
- These stores employ nearly 130,000 people.
- The hobby and toy store industry is responsible for about $17 billion in revenue each year.
What Could Go Wrong at a Hobby or Toy Shop?
There are a few ways in which your hobby or toy store may suffer a severe financial loss. A fire or a major weather event could damage the store and the property inside it, a disaster could force your business to close for an extended period or your business could end up on the wrong side of a liability lawsuit. Commercial insurance mitigates these and other risks so you can focus on running a profitable business.
The good news is that hobby and toy stores are not considered high-risk industries. An independent insurance agent should have no problem finding you a choice of competitively priced policies from companies that are willing to insure your business.
Be Sure You Have Sufficient Property Damage Coverage
Commercial insurance policies provide property coverage in the forms of building insurance and contents insurance. Building insurance covers damage to the structure of the building itself and is necessary only if you own the building. If you lease your retail space, your landlord may require you to you provide proof of commercial insurance as part of your lease agreement. Contents coverage covers the equipment, merchandise and other items you keep inside your store.
It is important that your coverage limits be high enough to cover your full inventory. There may be times of the year, such as during the months leading up to Christmas, when your store has larger inventories in stock. In this case, you may want to talk to your insurance agent about purchasing an endorsement that will enable to you have higher coverage levels during these peak times.
What Are Some Liability Concerns Toy and Hobby Store Owners Face?
The largest liability risk that owners of toy and hobby stores face is potential lawsuits for injuries sustained by customers while shopping in the owners' stores or walking through their parking lots. Even if your business is found not at fault, you can still be out large sums of money due to legal defense fees. General liability insurance provides compensation for legal fees, court costs and assessed fines in the event that your business is sued for liability.
What Other Insurance Do Hobby and Toy Shop Owners 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. These are
- Business Interruption Insurance: This insurance provides a continuation of income in the event that a covered event forces your business to close its doors for an extended period. Coverage typically lasts until your hobby or toy store is able to resume normal business operations.
- Worker’s Compensation Insurance: This insurance, which is required in most states, is designed covers the medical treatment of injuries sustained by employees while on the job.
- Health Insurance: By law, if you employ at least 50 full-time employees, you are responsible for subsidizing their health care insurance costs.
- Employment Practices Liability Insurance: This provides coverage for legal defense fees and potential punitive damages in the event that an employee sues your business for sexual harassment, discrimination or any other illegal business practices.
- Employee Dishonesty Insurance: This can protect your business from loss in the unfortunate event that one of your employees steals from your business.
There may be additional types of insurance that are a good fit for your specific business, particularly if you have opened your store with a business partner. You can speak with your independent insurance agent to learn more.
Find Specialty Business Insurance for Your Hobby or Toy Store
Purchasing business insurance for a hobby or toy store can sometimes be a complex process, particularly if you are building a business insurance policy for the first time. Independent agents in the Trusted Choice® network are here to help. These agents can assist you with determining your various exposures and ensuring that you have the right coverage to mitigate these risks. Contact a Trusted Choice agent near you to learn more and compare quotes on hobby or toy shop insurance policies.