You’ve got your diving equipment shop all stocked with goggles, flippers, and underwater everything. But before you can start preparing clients to hit the depths, you need to make sure your shop has proper insurance.
The biggest risks facing a diving equipment shop are the goods inside your store and the liability of someone getting injured as a result of your products. An independent insurance agent can make sure you have the proper coverage for your property, products, and yourself.
Common Risks for Diving Equipment Shops
Insurance policies are designed to protect your diving equipment business against the many risk factors that occur as you conduct business. These policies serve as a buffer against lawsuits and losses which can potentially result in significant financial loss and/or bankruptcy.
Diving equipment shops are at an increased risk for these risks. Here are just a few of the many risks that you may or may not be aware of while running your business:
- A regulator that you sell malfunctions and causes injury to a customer
- Your employees accidentally hit another vehicle while making a delivery
- A customer slips and falls in your showroom
- A repair that one of your technicians makes ends up damaging a customer’s equipment
- Fire breaks out in the middle of the night, burning your inventory and the adjacent businesses
- One of your trainers is accused of negligence during a dive lesson
- And more
Essentially, having insurance gives you peace of mind to operate your business in exchange for monthly or yearly premium payments. Policyholders may also have to pay a deductible — an upfront payment — before coverage kicks in and covers the remaining damage.
If you’re still on the fence about getting a comprehensive insurance policy, you may not have a choice if:
- Your landlord requires it to rent a property
- Your mortgage lender requires minimum insurance coverage as part of the terms of the loan
- Your business meets the state’s workers' comp program guidelines for covering workers
There are a few rare circumstances where you may not need insurance for your diving equipment shop, but these instances are rare — such as owning the property outright or self-insuring through a third party.
Speaking with an independent insurance agent can give you an idea of how important insurance coverage is, as well as how affordable it can be. Be sure to discuss the risk factors of your business with an independent insurance agent, as you may learn just how vulnerable your diving equipment shop may actually be.
What Types of Insurance Coverage Do I Need for a Diving Equipment Shop?
A diving equipment shop needs insurance coverage for every aspect of the business. Here are the most common policies, which are typically grouped under a business owners policy (BOP):
- Commercial property coverage
- General liability insurance
- Workers' compensation
- Commercial automobile insurance
|Type of Coverage||Description of Coverage||Exampl es|
|Commercial Property Coverage||Your diving equipment store needs property insurance in situations where the business needs to be reimbursed following property damage or lost property. This policy covers the cost of replacing your business equipment or other property when lost/damaged by fire, theft, vandalism, or natural disasters (excluding floods, earthquakes, etc.). Property coverage may include business equipment, inventory, the structure of offices/premises, and tools.||Smoke damage from an electrical fire ruined your stock and interrupted your ability to handle customers until your showroom was rebuilt. Your business was vandalized in the middle of the night and you need to offset the cost of cleaning up your premises. Hailstorms damage your windows. A power surge destroys your computer equipment.|
|General Liability Insurance||General liability insurance covers your diving equipment shop from some of the most common liabilities from third-party non-employees, such as customers or independent contractors. General liability covers legal bills and settlements resulting from bodily injury, property damage, medical payments, legal defense and judgment, and personal and advertising injury. Because your diving equipment shop may hire instructors and technicians, this type of insurance coverage may prove useful when damage or physical injury is caused to third parties.||Your employee is loading tanks into the truck when he drops one on the foot of a customer who sues you for medical bills. Another diving business has sued your company for slander. A customer slips on wet flooring in your restroom and breaks his wrist.|
|Workers' Compensation||Workers compensation insurance is mandatory in most states for any non-owner employees. It is a broad form of insurance coverage that protects your diving equipment shop from any number of costs arising from the workplace. This coverage is important for claims, as lawsuits are generally avoided if injured workers file a claim through workers' compensation. Also, criminal charges may be filed for those that do not comply with state coverage minimums. Workers' compensation can pay for lawsuits, funeral costs, medical bills, ongoing wages for injured or sick employees, and support payment for any dependents.||A worker develops an inner ear infection from faulty scuba equipment. One of your employees develops an illness from toxic chemicals from your store.|
|Commercial Automobile Insurance||A commercial automobile insurance policy can protect your diving equipment shop from losses that arise when car accidents happen.||Your delivery driver accidentally runs over a customer’s motorcycle.|
Insurance is customizable for a diving equipment shop depending on its needs. Most insurers offer umbrella insurance, which increases the liability of existing insurance policies by paying a single premium if coverage limits are met for preexisiting policies. This coverage can include:
- General liability insurance
- Professional liability
- Commercial auto insurance
The value of an umbrella is that it pays for any lawsuits that exceed the current limits of your coverage, typically in increments of $1 million for covered events. This can be useful if, for example, you are being sued by multiple parties.
Additional Forms of Insurance for Diving Equipment Shops
No two diving equipment shops are alike, and insurance can be tailored to your business model as needed. The following is a list of some other available coverages that you should discuss with an independent insurance agent:
- Business interruption insurance
- Equipment breakdown insurance
- Cyber liability insurance
- Employee dishonesty coverage
- Earthquake insurance
- Flood insurance
- Errors and omissions (E&O) insurance
- Product liability insurance
What is the Cost of Insuring My Diving Equipment Shop?
As mentioned before, every diving equipment shop is different. The average cost of annual premiums for commercial business insurance can range from as low as $300 annually up to $3,000 annually. However, you can expect average premium rates to hover around $1,200 per year. Of course, the size and extent of your operations may influence premiums greatly. For example, if you only run your diving equipment shop during the warmer months, you can save on premiums or have reduced coverage during non-operational months.
Risk Factors for Higher Insurance Premiums
The following are general parameters that directly influence your diving equipment shop’s premiums:
- Size of premises
- Condition of the property
- Business hazards
- Payroll size
- Claims history
- Employment status of employees
- Number of employees
- Severity potential
- Driving risks
- Driver demographics
- How and where you drive
- Type of driving and vehicle
- Driving record
NAICS Code for Insurance Costs
One of the most important factors that insurers use to determine coverage for your diving equipment store is the government’s North American Industry Classification System (NAICS) code. NAICS codes are used for insurers to compute premiums and risk, as well as a number of other financially related purposes, like determining tax liabilities and qualifying for loans.
In most cases, exercise equipment stores are classified under the primary code of 451110, which stands for ‘Sporting Goods Stores.’ However, if your diving equipment store is engaged in other forms of business, your business may have a different code. Consult an independent insurance agent to find out your NAICS code and how your business is classified.
Reducing the Cost of Diving Equipment Insurance
There are a number of ways to reduce your insurance premiums:
- Bundling coverage with other policies
- Reducing risks around your premises, including installing smoke alarms, carbon monoxide alarms, sprinkler systems, and more.
- Providing adequate oversight and intensive training for your employees
- Increase your deductible
How to Find the Best Insurance for Your Diving Equipment Store
Insurance policies can be complex, and searching through options can be confusing, time-consuming, and frustrating. An independent insurance agent's role is to simplify the process.
When it comes time to purchase insurance, they’ll break down all the jargon and explain the nitty-gritty so you understand exactly what you're getting.
And should you need to file a claim, you’re not alone. Your agent will be right there to help guide you through every last step and get your business back to where it all was. How great is that?
Why Online Quotes Aren’t Always the Best Way to Shop
Getting your insurance quotes online can be tempting. Sure, it’s fast and easy, but are the quotes you are getting actually accurate? And are you getting quotes for all the different types of coverage your business needs?
Online quotes cannot give you the whole picture. They often omit important coverage, which may result in you being unable to get compensation if something disastrous happens. And they can leave out cost-saving opportunities such as discounts and bundling opportunities that an independent agent can help you take advantage of.
Instead of getting an online quote, find an independent insurance agent near you, and schedule a one-on-one consultation to discuss your options for the best coverage for your diving equipment store.
The Benefits of an Independent Insurance Agent
Independent insurance agents have access to multiple insurance companies, ultimately finding you the best coverage, accessibility, and competitive pricing while working for you. Find an independent insurance agent in your community here.
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