Thrift stores typically sell used goods like clothing, shoes, housewares, furniture, and other items. Most items in a thrift store’s inventory are donated to the store by the public in order to then be sold at very low prices. Some thrift stores are independently owned, while others are affiliated with larger non-profit organizations or charities.
Owning a thrift store can leave you vulnerable to some unexpected and costly events. Why leave anything to chance? Would you be able to recover if a storm, a fire, theft, or a lawsuit impacted your store?
Why Do You Need Thrift Store Insurance?
Thrift stores often sell a wide variety of used items, from furniture, books, and baby clothes, to vintage records, men’s and women’s clothing, and Halloween costumes.
Thrift store owners take great care making sure the items on their sales floor are clean, safe, and in good condition. Most thrift store items are safe and won’t pose any problems to customers who purchase them, but there’s no guarantee that a used item won’t pose some type of safety problem.
Many children’s items like cribs, strollers, and car seats have stringent safety requirements that may be outdated or otherwise compromised with used items. Things like used electric appliances, stuffed animals, helmets, and more might also present a safety hazard to customers.
This is one of the more serious risk exposures for a thrift store, and is one of the primary problems that business insurance can protect against.
Other complications can arise simply by working with with customers, having employees, owning commercial property, and driving vehicles for business purposes.
Whether you're plagued by employee theft, a fire in your store, or injuries caused by products you sell, you need thrift store insurance to help you recover when things go wrong.
What Does Property Insurance Cover?
Property losses are one of the biggest threats to any store or shop. These losses can come a variety of sources, such as:
- Your clothing and other soft goods inventory is highly flammable. A fire in your thrift store could cause a total loss.
- Your inventory can also be destroyed by smoke or water. A fire in an adjacent store or a small fire in your stockroom could cause smoke or water damage that destroys all of your in-stock merchandise, as well as your fixtures, furnishings, and cash registers.
- Severe weather like a tornado can level a building. Even a severe thunderstorm can force a tree through your storefront window or cause a lightning strike that destroys all of your electronic equipment.
Commercial property insurance: This covers the costs of repairing or replacing damaged or destroyed physical assets, such as your actual store structure (if you own your building) and its contents, such as computers, fixtures, inventory, artwork, furnishings, display shelves, and more.
Since thrift stores often carry more product at certain times of the year, such as during the holidays, it’s a good idea to talk to your insurance agent about how to properly value your business property for insurance purposes. Excessive coverage is an unnecessary expense, and too little coverage could leave you seriously underinsured if you have to make a claim.
Your agent can help you determine the proper valuation of your business property, help you understand the best way to cover it, and help you manage and amend your coverage limits depending on seasonal inventory fluctuations.
What Is Business Interruption Insurance?
When your business sustains property damage, you can also face loss of income if the damage renders you unable to operate or meet sales goals for a period of time while you make repairs, rebuild your store, or replace lost inventory.
Business interruption insurance: This complements your commercial property coverage. Imagine you have a period of business interruption due to a covered loss (e.g., a fire forces you to close to make repairs and replace your inventory). You might never recover the lost sales and your future could be in jeopardy.
But business interruption coverage, or business income coverage, protects your earnings if your business must temporarily close because of damage caused by some type of disruption (fire, hail, wind, equipment breakdown). This coverage is usually quite affordable and pays for rent, employee salaries, lost income, relocation fees, and more.
What Does Liability Insurance Cover?
“Trip and fall” injuries are common in retail settings. If someone is injured in your store or as a result of your business operations, chances are you’ll be responsible for paying for any medical expenses for the injured party. If you are sued for additional damages, you’ll be on the hook for attorney fees, court costs, and possibly a six- or seven-figure financial settlement or court-ordered judgment against you.
That’s why commercial general liability insurance (CGL) is so important for a thrift store. It pays for direct expenses for an injured party as well as your legal expenses and financial payouts if you are sued.
Your CGL policy also covers claims related to product liability, advertising liability, slander and libel. That means that if something you sold injures someone, your CGL policy would likely respond and pay for any medical expenses, as well as any expenses related to a resulting lawsuit.
Or, if an employee posted a false statement about a competitor on your Facebook page resulting in lost income for the competitor, you could be sued for financial damages. Your CGL policy would be your lifeline, paying for attorney fees, court costs, and any settlements or court-ordered judgments paid out to the injured party.
Many small business owners purchase a business owners policy (BOP), which packages property, liability, and business interruption coverage into a single, affordable, package policy.
Additional Thrift Store Insurance Policies
You’ll likely need several other types of coverage to be completely protected from all of the risks you face in your thrift store. You can purchase endorsements (add-ons to your basic policies) or stand-alone policies as needed to fill all of the gaps.
- Commercial umbrella insurance: This provides an important safety net for cases when a claim exceeds the coverage limit on your general liability policy. If you were hit with an extremely costly lawsuit, this policy would kick in when the coverage on your general liability policy is exhausted.
- Workers’ compensation insurance: This is required for almost every business that has employees. It compensates employees who are injured on the job by paying for medical expenses and lost wages related to their injury. Your employees can trip over racks, injure their backs while unloading shipments, fall off ladders, and more. This coverage ensures their expenses will be covered in these cases, and prevents them from suing you for additional damages.
- Crime coverage: This protects your business from any number of crimes that could be committed in your thrift store. This includes vandalism, shoplifting, and employee theft or embezzlement.
- Sign coverage: This pays for damage to outdoor signs that are not attached to your building when the damage is caused by weather, vandalism, fire, etc.
- Utility interruption coverage: This provides income protection if you are unable to operate due to a covered utility (water, electrical) interruption.
- Employment practices liability insurance: This covers you if an employee sues you for discriminatory employment practices.
- Cyber liability insurance: This protects you from the costs related to certain cyber crimes. If someone hacks into your website, steals personal financial data from you or your customers, or causes other type of damage, cyber liability insurance helps to cover money lost and helps to pay for damage caused to your customers.
- Commercial auto insurance: This covers any vehicles you use to pick-up donated goods. It protects the vehicle and provides liability coverage if your driver causes an accident that injures someone or causes third-party property damage. If you or any of your employees drive personal vehicles for business purposes, ask your agent about your need for non-owned auto liability insurance.
How Much Does Thrift Store Insurance Cost?
Thrift store insurance costs will differ from store to store. Your costs will likely be higher or lower than average depending on the unique characteristics of your business, such as the location, the number of employees, the value of your inventory, whether or not you own your building, whether or not you own vehicles, and many more variables.
The amount of coverage you need and the deductibles you choose also impact your thrift store insurance rates.
Find and Compare Quotes
An independent insurance agent can work with you one-on-one to determine the types and amounts of coverage you need. Your agent can get quotes from multiple insurance companies so you can evaluate the cost and coverage options and make the best choice.
Benefits of an Independent Agent
Our agents simplify the search process for finding the right thrift store insurance. They’ll walk you through the handpicked policy options and explain the details and options.
Most importantly, they’ll be there for you when claim time comes. They know the ins and outs of the process and will make sure your claim is handled appropriately.
The Lowdown on Online Quotes
Online quotes can be tempting. They are fast and easy to get — but are they accurate? And are you getting quotes for the right coverage? For business owners, choosing speed over accuracy can cost you.
Online quotes can’t and don’t see the whole picture. They can omit important coverage that will leave you devastated if something unexpected happens. And they can leave out cost-saving opportunities that an agent can help you take advantage of.
Instead of getting an online quote, find an independent insurance agent now, and get one-on-one consultation and affordable options for the best coverage for your unique needs.
TrustedChoice.com Article | Reviewed by Paul Martin
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