Bike Shops Insurance – Cost and Coverage

Whenever you budget the expenses of your business, bike shops insurance must be included in the list because you can’t always know exactly what can happen in the future.

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 unwanted happens.

Like any business owner, for your bike shops enterprise, you must consider how much financial risk you are taking on.

If your bike shops business runs without proper insurance, you are taking an enormous chance not just of losing some money but of a final 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. 

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

The question is, can you afford to NOT have insurance for your bike shops business?

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

Your bike shops business is not harbored by laws in the same way as states are, where edicts 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 a judge can award in any case against the state.

In a court case, it’s purely the duty of the jury to award whatever amount they deem appropriate, even sometimes giving a claimant more than they have sued for.

When you are running your bike shops operations, you can’t deny responsibility for the outcomes of your actions.

Even more importantly, unless you have spent up-front the money necessary to have your business running as a corporation, all of that liability belongs to you as a person.

What does bike shops insurance protect you from?

For your bike shops business, the most important types of insurance are intended to cover the risks to your business from accidents, from unexpected events, and from mistakes.

As well there are some mandatory kinds of insurance that various states require.

In the next few paragraphs, we will outline the most important points any bike shops business owner should know when negotiating the insurance needed.

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

Liability insurance

General liability insurance

Any bike shops business is dealing directly with other people, and that means you always 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 demand compensation.

General liability insurance policy for your bike shops business protects you against claims coming from injury to clients or damage to their property.

It protects your bike shops 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 demand proper liability insurance.

The average level of general liability insurance for your bike shops business would be with a upper limit of $1 million for a single submission 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 shops insurance operations.

Professional liability insurance for your bike shops business

In the event where a client alleges some negligence, errors, or omissions in how you conducted your bike shops business for them, you can quickly be involved in a monetary claim.

Even if the lawsuit against you is ruled in your favor, the cost of defense can be large, and the impact on your reputation can be damaging.

Every small bike shops 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 shops insurance section below for average prices of professional liability insurance for your bike shops operations.

Product liability insurance

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

You need to know the specific laws of product liability in your own state.

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

To cover yourself against any following lawsuit, you need Product liability insurance for bike shops

Only you can estimate exactly how much insurance you should get.

Best advice is to consult with experienced insurance agents, brokers or company representatives for guidance.

Commercial insurance

Commercial vehicle insurance for your bike shops business

Be careful! – most policies for private vehicle insurance do not cover any event like theft or accidental damage when the car 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 proper commercial vehicle insurance package.

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

In addition, in case of any accident, the truck itself, the content and any legal bills, medical expenses, and property damage is guaranteed if your van is involved in a crash.

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

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

Tools and Equipment insurance

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

The equipment 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 specialized gear quickly out of your own pocket, you should have full-level equipment insurance so that you can immediately buy everything needed to keep your bike shops business running.

It is difficult to advise how much equipment insurance you need – it’s basically dependent on how much you have invested in your bike shops business’ equipment.

Commercial Property insurance

Any bike shops business that owns or rents space in a building needs a commercial property insurance policy.

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

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

If your bike shops business deals in areas of high risk, like California or Georgia, supplementary coverage may be needed for earthquakes and hurricanes or tornadoes.

In other states like Washington, where intense cold snaps can cause damage to outer coverings of bike shops business premises, there is a need for more supplementary cover than in warmer climes.

Whereas the level of cover depends mainly 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 shops insurance section below to give some indication of the average prices per million dollars of property insurance for your bike shops business.

Temporary insurance by month, week or day for your bike shops business

Is your bike shops business working part-time or casually, or is the level of business seasonal?

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

By only paying for that period of cover, you will save by having less premiums but still having adequate risk cover.

The essential feature of short-term insurance is that you buy the cover for a defined period – a designated 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 higher 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 shops business

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

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

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

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

There are two limits that will rule whether BOP is suitable for your own business.

BOPs will not cover your professional liability or commercial vehicle cover.

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

The typical business that is eligible for a BOP policy must have fewer than one hundred employees, and under five million dollars in annual revenue.

As well, you must separately take out the mandated worker’s compensation, health and disability insurance as determined for your state.

Workers Compensation insurance for your bike shops business employees

In many states, it is mandatory to have workers compensation insurance when your bike shops business has one or more employees.

Workers compensation insurance covers the operation against any costs that arise if any hired hand 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 regulations in this regard can leave you as the employer obliged 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 cannot take out your workers compensation obligations from private insurance corporations.

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

However, you must refer to the relevant authorities in your state.

Average costs of these types of insurance

Although every bike shops insurance level is unique, there are enough examples of standard quotes from insurance companies for us to give appropriate guidelines, including what are the cheapest rates offered.

Of course, you should always check with an insurance representative what’s relevant for your business.

The list below is of annual premiums we have collected for the main types of insurance your bike shops businesses needs.

Cost of insurance for your bike shops operations depends on many different factors.

We have reckoned these figures for small self-employed bike shops businesses.

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

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

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

As well you can let the internet do the work for you by enquiring about insurance companies near where your business is located.

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

FAQ

What is small business insurance for bike shops operations?

This is an umbrella term used to describe basic insurance policies designed to protect bike shops business owners from risks like bodily injury, property damage, claims of negligence.

Does my bike shops business have to have insurance?

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

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

What does a small bike shops business insurance policy cover?

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

The exact cover will vary based on your own operations.

See the table in the costing section above for average prices of the recommended policies for bike shops insurance.

How much will bike shops business insurance cost?

In addition to the size of the business, some other factors, such as location and claims history, are used to determine your policy’s cost.

You should talk to professional insurance agents and brokers, or insurance company representatives.

You can search for more information insurance for bike shops, in the search box below, and follow the relevant links.

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