Bike Shop insurance – cost and types of policies

Whenever you budget the expenses of your business, Bike Shop insurance must be high on the list because you can’t always know exactly what could happen in the future.

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With the protection provided by insurance against accidents and all the other types of insurance we will tell you about, you can protect your business and yourself in case something unexpected happens.

Like any business owner, for your Bike Shop enterprise, you must consider how much financial danger you are taking on.

If your Bike Shop business runs without proper insurance, you are taking an enormous chance not just of losing some money but of a total wipe-out.

This is because the laws in every state are very strict in enforcing liability on the owners of businesses for the upshots of their actions. 

Bike Shop Insurance

In this article, we are giving very general guidelines for startup businesses to explain what the main kinds of insurance that you need are, and where we can, a rough guide to how much you can expect to pay.

The question is, can you afford to NOT have insurance for your Bike Shop business?

What this means, for any Bike Shop business owner, is that if some person claims that your actions caused them some physical or economic damage, a court can award damages far beyond the total size of your business.

Your Bike Shop business is not sheltered by laws in the same way as states are, where legislation can place a “cap” on the maximum level of liability.

In some states, like New Jersey, there are specific monetary levels that limit the amount an adjudicator can award in any case against the state.

In a court case, it’s purely the privilege of the jury to award whatever amount they deem appropriate, even sometimes giving a person more than they have claimed.

When you are running your Bike Shop operations, you can’t avoid responsibility for the outcomes of your actions.

Even more importantly, unless you have spent beforehand the money necessary to have your business running as an LLC, all of that liability belongs to you as a person.

What does Bike Shop insurance protect you from?

For your Bike Shop business, the most important sorts of insurance are intended to cover the risks to your business from accidents, from unexpected events, and from mistakes.

Also there are some official kinds of insurance that various states require.

In the next few paragraphs, we will outline the most important points any Bike Shop business owner should consider when negotiating the insurance needed.

The main categories of insurance for your Bike Shop businesses are liability insurance, commercial insurance, asset insurance and workers compensation insurance.

Liability insurance

General liability insurance

Any Bike Shop business is dealing directly with customers, and that means you generally have the danger that some accident can happen to them bodily or else something of theirs can be damaged.

In such a case, they can require compensation.

General liability insurance policy for your Bike Shop business protects you against claims coming from injury to visitors or damage to their property.

It protects your Bike Shop business from the claims themselves and as well to any associated court costs and legal fees of the lawsuits.

In many cases, it will even help you to qualify for extra business from city and state organizations, where contracts require proper liability insurance.

The average level of general liability insurance for your Bike Shop business would be with a boundary of $1 million for a single claim and a total of $2 million for the whole year.

See the table in the costing section below for average prices of general liability insurance for your Bike Shop insurance operations.

Professional liability insurance for your Bike Shop business

In the event where a customer alleges some negligence, errors, or omissions in how you conducted your Bike Shop business for them, you can quickly face a monetary claim.

Even if the case against you is judged in your favor, the cost of defense can be substantial, and the impact on your reputation can be damaging.

Most small Bike Shop business should have enough professional liability insurance to cover an individual claim of $25,000, with annual cover of $50,000.

See the table in the cost of Bike Shop insurance section below for average prices of professional liability insurance for your Bike Shop operations.

Product liability insurance

Whatever goods you sell or advice you give about the goods, you are running a risk that customers may claim that the results didn’t meet your description of function, or that your advice was basically incorrect.

You need to be aware of the explicit laws of product liability in your own state.

For example, in California, all businesses in the supply chain can be held culpable for results caused by products claimed to be defective.

To cover yourself against any likely lawsuit, you need Product liability insurance for Bike Shop

Only you can determine exactly how much insurance you need.

Best advice is to talk to experienced insurance agents, brokers or company representatives for help.

Commercial insurance

Commercial vehicle insurance for your Bike Shop business

Beware! – practically all policies for private vehicle insurance do not cover any event like theft or accidental damage when the vehicle is being used for business purposes.

The proper way to make sure that your vehicle is insured for both its own value, and the valuable contents, is by taking out a designated commercial vehicle insurance package.

Commercial car policies cover the value of any vehicle in case of accident, malicious damage, fire, or theft.

Also, in case of any accident, the truck itself, the content and any legal bills, medical expenses, and property damage is insured if your van is involved in a collision.

Most states, other than Virginia and New Hampshire, require this type of insurance.

The wanted value of the insurance is worked-out for the depreciated value of the vehicle, and your intended level of cover of contents. 

Tools and Equipment insurance

Since your Bike Shop business needs specialized and costly equipment, you can appreciate how much it can cost to replace it in case of any damage, loss, or theft.

The tools may be subject to malicious damage, deliberate fire, theft, other such unforeseen acts.

In addition, acts of nature like lightning strikes, hurricanes, earthquakes, and other highly damaging natural events can eliminate your whole business in one stroke.

Unless you can afford to immediately replace such unique gear quickly out of your own pocket, you need full-level equipment insurance so that you can immediately buy whatever needed to keep your Bike Shop business running.

It is impossible to advise how much equipment insurance you need – it’s essentially dependent on how much you have invested in your Bike Shop business’ equipment.

Commercial Property insurance

Any Bike Shop business that owns or rents space in a building must have a commercial property insurance policy.

If you own the space, you certainly have a substantial capital investment, in addition to a big liability if there’s a mortgage.

Your physical building location should carry insurance coverage for the value of the premises and contents against accidental occurrences like fire and storms, and against criminal damages like theft and vandalism.

If your Bike Shop business deals in areas of high risk, like California or South Carolina, extra coverage may be needed for earthquakes and hurricanes or tornadoes.

In other states like Illinois, where unlimited cold snaps can cause damage to outer coverings of Bike Shop business premises, there is a need for more supplementary cover than in warmer climes.

Although the level of cover depends completely on the value of the property, it’s not possible to say what cover your need, but we have been able in the table in the cost of Bike Shop insurance section below to give some estimate of the average prices per million dollars of property insurance for your Bike Shop business.

Temporary insurance by month, week or day for your Bike Shop business

Is your Bike Shop business working part-time or casually, or is the level of business fluctuating?

Using short-term insurance makes perfect sense. Business insurance by the month, day, or week – temporary insurance for Bike Shop – are special policies where you can cover a designated period when you want to be covered.

By only paying for that period of cover, you will save by having lower premiums but still having the same risk cover.

The important feature of short-term insurance is that you pay for the cover for a defined period – a specific date, or a week or month starting on a specific date, for example for 30 days beginning on the specified date.

When you are expecting periods of larger business activity, get the existing cover improved.

Talk to your insurance agent, broker or the company’s representatives to see what options you have.

Business Owners Policy BOP for your Bike Shop business

You have the chance to combine most of the important kinds of small business insurance in one policy that is known as the business owner’s policy – BOP.

A BOP combines commercial property and public liability insurance by amalgamating these coverages into one insurance policy, which can save you money.

BOP insurance will shield you if any claims of injury or property damage are made.

It is mostly the right choice for small and medium-sized Bike Shop businesses, such as yours.

There are a few limits that will dictate whether BOP is suitable for your own business.

BOPs cannot cover your professional liability or commercial vehicle cover.

Also, the size of your business will dictate whether you are allowed to take out BOP cover.

The normal business that can take out a BOP policy must have fewer than one hundred employees, and under five million dollars in annual revenue.

In addition, you must separately take out the necessary worker’s compensation, health and disability insurance as determined for your state.

Workers Compensation insurance for your Bike Shop business employees

In almost all states, it is mandatory to have workers compensation insurance when your Bike Shop business has one or more employees.

Workers compensation insurance covers the business against any costs that arise if a worker experiences an injury or becomes sick as a result of work.

The benefits provide for medical expenses, death benefits, lost wages, and vocational rehabilitation.

Failure to meet a state’s requirements in this regard can leave you as the employer required to pay penalties levied by the states.

Some states, such as North Dakota, Ohio, Washington, West Virginia, and Wyoming only authorize coverage from the government-run monopoly state funds.

In these states, you may not get your workers compensation obligations from private insurance companies.

Workers compensation rates are calculated based on the employee’s pay, and usually come out at around $1.00 per $100 per month.

However, you must see the relevant authorities in your state.

Average costs of these types of insurance

Although every Bike Shop insurance level is unique, there are enough examples of average quotes from insurance companies for us to give rough guidelines, including what are the cheapest rates offered.

Of course, you should always check with a broker what’s relevant for your business.

The list below is of annual premiums we have gathered for the main types of insurance your Bike Shop businesses needs.

Types of insurance Price range
Public liability insurance $294 – $783
Product liability insurance $240 – $788
Equipment insurance $409 – $1187
Commercial vehicle insurance $1586 – $3279
General liability insurance $659 – $1015
Commercial insurance $1002 – $2126

Cost of insurance for your Bike Shop operations depends on many different factors.

We have estimated these figures for small independent Bike Shop businesses.

In larger states like Texas, premiums are generally about 20%-30% higher than national averages, but in smaller states like Utah, they will be about 20%-30% cheaper.

The location and size and type of your Bike Shop business can have a big effect on the cost of different policies.

You should discuss with professional insurance agents and brokers, or insurance company representatives.

Also you can let the internet do the work for you by searching for insurance companies near where your business is located.

Another good source of information is the local Better Business Bureau in your city.

FAQ

What is small business insurance for Bike Shop operations?

This is a general term used to describe basic insurance policies designed to protect Bike Shop business owners from risks like bodily injury, property damage, claims of negligence.

Does my Bike Shop business have to have insurance?

Some of the types of insurance are not mandatory for you to operate your business, but they can protect you from risks in your business operations.

Several other forms are required by state law, such as workers compensation and vehicle insurance.

What does a small Bike Shop business insurance policy cover?

Liability insurance provides insurance against lawsuits or claims filed by a customer for bodily injury, property damage, or negligence.

The specific cover will vary based on your own operations.

See the table in the costing section above for average prices of the best policies for Bike Shop insurance.

How much will Bike Shop business insurance cost?

On top of the size of the business, certain other factors, such as location and claims history, are used to determine your policy’s cost.

You should discuss with professional insurance agents and brokers, or insurance company representatives.

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