How to Insure Your Used Clothing Store

Protect your small business from costly problems.

Used Clothing Store Insurance

Owning a used clothing store can be a profitable and rewarding business. Whether you own a consignment shop or a thrift shop, any kind of retail clothing store is susceptible to a number of costly problems. Your used clothing store may be a target for shoplifters, and what’s more, dishonest employees can steal merchandise or cash right out from under your nose.

You need used clothing store insurance to help you recover when things go wrong. That means talking to an independent insurance agent about purchasing a comprehensive set of business insurance policies and endorsements that directly address all of your unique risks.

Why Do You Need Used Clothing Store Insurance?

If an unexpected event causes some kind of damage to your store, your used clothing store insurance is there to help you recover.

Consider all of the things that could go wrong (and result in serious repair costs, loss of income, or a lawsuit) during the course of your workday.

  • Accidents, such as slips, trips, and falls in the store or parking lot
  • Damage to your inventory (clothing that is highly susceptible to fire, smoke, and water damage) due to some catastrophic or unexpected event (fire, smoke, weather, vandalism, etc.)
  • Inventory damage due to careless shoppers or vandalism
  • Damage to your building, computer systems, fixtures, and furniture due to fire, smoke, water, or weather
  • Loss of income due to a catastrophic or unexpected event (a fire damages part of your store, forcing you to close while repairs are made)
  • Shoplifting and employee theft of cash or inventory
  • Employee injuries (falling off a ladder, back injury due to heavy lifting)
  • Employee lawsuits related to discrimination or other claims

What Does Used Clothing Store Insurance Cover?

Used clothing store insurance should cover physical damage to your physical space (if you own it) and other commercial property. It should also allow you to take financial responsibility for any customers or members of the public that get injured on your property or as a result of buying something from you.

In order to get the comprehensive coverage you need, you’ll likely need to purchase several basic policies as well as a few customized endorsements (add-ons to basic policies) or additional policies that fill any gaps in your basic coverage.

Commercial property insurance: Commercial property insurance helps you rebuild or make repairs when an unexpected event—like a fire, a flood, hail, lightning, or a tornado—destroys your merchandise and your physical space (structure). Even if you rent your space, you still need this coverage to help you replace, rebuild, or repair computers, cash registers, inventory, equipment, furniture, fixtures, and more after a covered event.

Business interruption coverage: Business interruption insurance compensates you for lost business income and pays for operating expenses if you must temporarily close after a covered loss (e.g., a fire damages your stockroom and part of the sales floor, and you must close your store during the rebuilding process).

Commercial general liability (CGL) insurance: General liability insurance covers claims against your business due to negligence on the part of you or your employees. If someone is injured on your premises or as a result of your operations, your CGL policy pays for medical expenses or repair bills for the injured party.

If, for example, a customer sustains a deep laceration from a sharp edge on a display shelf, your CGL policy would pay for any related medical expenses. Or, if an employee collecting shopping carts in the parking lot accidentally hits a customer’s car and causes damage, your CGL policy would pay for any related repair bills.

If you’re sued by the injured party, liability insurance pays for your legal defense, court costs, and any settlements or judgments that you must pay.

You may be able to bundle your basic property and liability coverage together into a packaged policy (business owners policy, or BOP) designed for small businesses owners.

What Other Used Clothing Store Insurance Policies Do You Need?

Talk to your independent insurance agent about your need for additional coverage for your used clothing store, such as the following.

  • Commercial umbrella insurance: This provides excess liability protection to any of several other policies you might have. If a customer injury in your store or as a result of purchasing something in your store leads to an expensive lawsuit that exceeds the limits of your commercial general liability policy, your commercial umbrella policy kicks in with higher coverage limits.
  • Commercial auto insurance: This ensures that you’ll be able to pay for any physical damage or injuries you cause if you are in an auto accident while driving for business purposes. If you have a business-owned vehicle that you use for running errands, making deliveries, or for other business purposes, you will be covered by your commercial auto policy if you cause an accident.
  • Workers’ compensation insurance: This is typically required for any business that has employees. It pays for lost income and medical expenses for employees that are injured on the job. Your employees could be injured while stocking shelves, opening boxes with a sharp box cutter, or repetitive motion.
  • 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.

Why Do You Need Crime Coverage for Your Used Clothing Store?

One of the most significant threats to any retail business is theft of inventory or cash. Nearly every retail store is likely to be the victim of a shoplifter at some point. What’s more, employees all too often steal property, money, and securities owned by their employers.

For a small used clothing store, even a small cash theft can be difficult to overcome. Crime coverage protects your business from vandalism, shoplifting, and employee theft and dishonesty. 

It can be purchased as a stand-alone policy or as an endorsement on another business insurance policy. It covers things like vandalism, theft, and shoplifting, as well as employee acts like forgery, alteration, unauthorized electronic funds transfers, credit card fraud, and more.

How Much Does Used Clothing Store Insurance Cost?

The cost to cover your used clothing store with a comprehensive business insurance program will vary depending on the following factors.

  • The size of your store
  • Your store’s location
  • The number of employees you have
  • The value of your inventory
  • The types of coverage and the coverage limits that you require
  • The crime and weather risk in your city

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 used clothing 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.

Information 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.

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TrustedChoice.com Article | Reviewed by Paul Martin

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