Consignment Stores Insurance – Cost and Types Of Policies

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

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

Like any business owner, for your consignment stores enterprise, you must consider how much financial liability you are taking on.

If your consignment stores business runs without proper insurance, you are taking a giant chance not just of losing some money but of a complete wipe-out.

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

In this article, we are giving very general guidelines for startup businesses to highlight 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 consignment stores business?

What this means, for any consignment stores business owner, is that if some person 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 consignment stores 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 a court can award in any case against the state.

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

When you are running your consignment stores operations, you can’t avoid responsibility for the consequences of your actions.

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

What does consignment stores insurance protect you from?

For your consignment stores business, the most important kinds of insurance are meant to cover the risks to your business from accidents, from unexpected events, and from mistakes.

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

In the next few paragraphs, we will describe the most important points any consignment stores business owner should consider when negotiating the insurance needed.

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

Liability insurance

General liability insurance

Any consignment stores business is dealing directly with members of the public, and that means you generally have the danger that some accident can happen to them bodily or else something of theirs can be spoiled.

In such a case, they can demand compensation.

General liability insurance policy for your consignment stores business insures you against claims coming from injury to clients or damage to their property.

It protects your consignment stores business from the claims themselves and in addition to any resulting court costs and legal fees of the lawsuits.

In many cases, it should 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 consignment stores 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 consignment stores insurance operations.

Professional liability insurance for your consignment stores business

In the event where a buyer alleges some negligence, errors, or omissions in how you conducted your consignment stores business for them, you can quickly have to fight a court case.

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

Almost all small consignment stores business should have enough professional liability insurance to cover a single claim of $25,000, with annual cover of $50,000.

See the table in the cost of consignment stores insurance section below for average prices of professional liability insurance for your consignment stores 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 the results didn’t meet your description of function, or that your recommendation was basically incorrect.

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

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

To cover yourself against any possible lawsuit, you need Product liability insurance for consignment stores

Only you can know 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 consignment stores business

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

The right 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 guarantee the value of any vehicle in case of accident, malicious damage, fire, or theft.

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

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

The necessary 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 consignment stores business needs specialized and expensive equipment, you will realize 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 unexpected acts.

As well, acts of nature like lightning strikes, hurricanes, earthquakes, and other highly damaging natural events can wipe-out 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 consignment stores business running.

It is hard to advise how much equipment insurance you need – it’s basically dependent on how much you have invested in your consignment stores business’ equipment.

Commercial Property insurance

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

If you own the building, you probably have a substantial capital investment, as well as a big liability if there’s a mortgage.

Your physical building location needs to 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 consignment stores business deals in areas of high risk, like California or Georgia, 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 consignment stores business premises, there is a need for more extra cover than in warmer climes.

Whereas the level of cover depends entirely 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 consignment stores insurance section below to give some idea of the average prices per million dollars of property insurance for your consignment stores business.

Temporary insurance by month, week or day for your consignment stores business

Is your consignment stores business working part-time or casually, or is the level of business variable?

Using short-term insurance makes perfect sense. Business insurance by the month, day, or week – temporary insurance for consignment stores – are special policies where you can cover a nominated 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 identical 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 consignment stores business

You have the option 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 packaging these coverages into one insurance policy, which can save you money.

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

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

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

BOPs cannot cover your professional liability or commercial vehicle policies.

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

The normal business that is eligible for a BOP policy must have no more than one hundred employees, and maximum five million dollars in annual sales.

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

Workers Compensation insurance for your consignment stores business employees

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

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

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

Failure to meet a state’s laws 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 take out your workers compensation obligations from private insurance companies.

Workers compensation rates are worked out 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 consignment stores insurance need is unique, there are enough examples of average quotes from insurance companies for us to give approximate 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 researched for the main types of insurance your consignment stores businesses needs.

Cost of insurance for your consignment stores operations depends on many different factors.

We have estimated these figures for small freelance consignment stores businesses.

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

The location and size and type of your consignment stores 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.

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

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

FAQ

What is small business insurance for consignment stores operations?

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

Does my consignment stores business have to have insurance?

Some of the kinds of insurance are not mandatory for you to open 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 consignment stores business insurance policy cover?

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

The precise cover will vary based on your own operations.

See the table in the costing section above for average prices of the best policies for consignment stores insurance.

How much will consignment stores business insurance cost?

In addition to the size of the business, several 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.

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

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