A gunsmith is a highly specialized and technical profession that requires a great deal of training and expertise. Gun owners can be downright passionate about their firearms. They may entrust a gunsmith with a firearm for repair, modification, alteration, carving, engraving and decorating and must be confident that the repairs or modifications will be done correctly. Ultimately, gun owners want their firearms returned to them in the same or better condition than before.
Gunsmiths must also recognize that their work involves powerful weapons that must be treated with care and respect. Whether they are sole proprietors or larger gun shop owners, gunsmiths need business insurance to protect their livelihood from financial loss due to a number of potentially devastating risks.
Firearms in the United States
There are more than 60 million firearms owners in the U.S. These gun owners possess over 330 million firearms of all types for the purposes of hunting, sport shooting, law enforcement, collecting and even self-defense. As a gunsmith or gun shop owner, you must be knowledgeable about all these reasons for owning a firearm and be prepared to do quality work on your customers’ costly and valued possessions.
There is an old saying that you are never as safe as when you are in a gun shop; the criminals know that they won’t get very far. But despite the old saying, gunsmithing work and gun shops are inherently dangerous and exposed to numerous types of property and liability risks that can be mitigated – in part – with the right business insurance.
It probably goes without saying that gunsmith businesses are unique and require equally unique insurance coverage. Whether you are a sole proprietor or a large gun shop owner that offers other products and services, gunsmiths need to work with an insurance agent who understands the business and knows where to find appropriate coverage.
For the purposes of this article, let’s assume that the gunsmith is part of a larger operation with additional retail exposures. This kind of operation faces risks due to theft, employee crime, weather, flammables and other fire hazards as well as gunsmithing exposures involving the quality of your work and the potential for damage to customer-owned firearms.
Liability Insurance for Gunsmiths
As a gunsmith, your goal is to provide a safe environment for your customers and employees and to provide quality products and services. You need to ensure that you do not damage a customer’s gun while you are making repairs and that you have some protection for your own property and your customers’ property in the event of fire, theft or any other disruption that affects your business.
Gunsmiths need commercial general liability (CGL) insurance to protect themselves as a result of negligent bodily injury and property damage they cause while doing business. General liability insurance offers broad protection for a variety of liability risks that your business is exposed to, from customer slips and falls to claims of advertising liability, slander, libel and more. Your CGL policy pays for your legal defense, attorney and court costs, and certain covered settlements or judgments that you must pay, up to your policy limits.
As a gunsmith, you may be susceptible to completed operations claims – or claims that the work you completed is faulty and that the faulty work caused some kind of bodily injury or property damage to a third party. There is usually some coverage for completed operations claims in a CGL policy, but this coverage is very complex. Often your CGL completed operations coverage excludes more circumstances than it includes, leaving you without the coverage you really need. Your best bet is to talk to an experienced agent about your completed operations exposures and the right kind of coverage for your needs.
Talk to Your Agent About Excess Liability Coverage
Gunsmiths have unique liability exposures that vary dramatically depending on the type of business you run, the products and services you offer, the location of your business, the size of your business, the number of employees you have and more. Whether you work out of your home as a sole proprietor or out of a retail establishment with a wide variety of product offerings, you need to ensure that you have enough liability coverage.
You might think that you have sufficient commercial liability coverage under your general liability policy. And while these policies do provide broad coverage, you may still need a commercial umbrella policy, or excess liability policy. You and your employees come into contact with numerous clients, suppliers, partners and other business associates every day, and every one of those relationships and contacts comes with a certain degree of risk. Do you think your commercial general liability (GGL) policy would provide enough coverage in every potential circumstance?
The sole purpose of commercial umbrella insurance is to provide an extra layer of liability protection to any of several other policies you might have, including commercial general liability, employer’s liability, and hired and nonowned auto liability. By purchasing one commercial umbrella policy, you essentially get higher limits on all of those policies rather than having to raise the limits on each policy individually.
Commercial umbrella insurance kicks in when the limits of your other applicable insurance policies have been exhausted. Depending upon the type of business you own and the business assets you need to protect, a commercial umbrella policy can provide millions of dollars in excess liability coverage. But be mindful of certain exclusions. Commercial umbrella policies may not cover errors and omissions claims, professional liability claims, product recalls, workers’ compensation claims, asbestoses-related claims and any claims related to pollution, war and terrorism.
Why Do Gunsmiths Need Property Coverage?
Gunsmiths need business property insurance to protect their building(s) and contents from costs associated with weather, fire, smoke, vandalism, theft and other types of property damage. Business property insurance not only protects your building but also your own computer systems, fixtures, parts inventory, tools and other equipment that you use in your operations.
Your business property policy should also include business interruption coverage, which provides income protection if you must temporarily cease operations due to a covered loss (fire, weather etc.).
Your independent insurance agent can help you determine if you should purchase a business owners policy, which is a small business insurance policy that includes property, liability and business interruption coverage in one affordable package.
Inland marine insurance is another type of property coverage that gunsmiths might need. It protects tools, equipment and supplies that you bring off-site to make repairs; commercial property and commercial auto policies typically exclude coverage for those items once they leave your business premises.
A primary role of a gunsmith is performing repairs or modifications to firearms owned by someone else. Firearms are expensive, and if something damages one of your customers’ guns while it is in your possession, you can be held responsible. Gunsmiths should consider bailee’s coverage, which is special coverage for customers’ property that is in your possession (and not covered under a basic property policy). Bailee’s coverage is an add-on to a business property policy that covers nonowned property that is stored at your shop or in your possession.
Other Coverage for Gunsmiths
There is a wide variety of business insurance policies that may be necessary for a gunsmith. The coverage you need is dependent on your specific business and the risks you might face. When talking with your independent insurance agent, be sure to discuss the following:
Gunsmith insurance is far from a one-size-fits-all solution. Gunsmiths are highly trained professionals who need an experienced adviser to help determine the best business insurance for how they run their specific business. An independent agent can work with multiple highly rated insurance companies who specialize in the types of specialty coverage that you might need. Compare quotes from multiple companies, and make sure that you are getting the right combination of coverage and price for your gunsmith operation.