Pawn Shop insurance – cost and coverage

Whenever you budget the expenses of your business, Pawn 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 general insurance and all the other kinds 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 Pawn Shop enterprise, you must consider how much financial liability you are taking on.

If your Pawn Shop business runs without proper insurance, you are taking a tremendous 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. 

Pawn Shop Insurance

In this article, we are giving very general guidelines for growing businesses to highlight 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 Pawn Shop business?

What this means, for any Pawn Shop 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 Pawn Shop business is not protected 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 Montana, 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 right 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 Pawn Shop operations, you can’t escape responsibility for the results of your actions.

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

What does Pawn Shop insurance protect you from?

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

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

In the next few paragraphs, we will describe the most important points any Pawn Shop business owner should know when negotiating the insurance needed.

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

Liability insurance

General liability insurance

Any Pawn Shop business is dealing directly with members of the public, 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 require compensation.

General liability insurance policy for your Pawn Shop business covers you against claims coming from injury to clients or damage to their property.

It protects your Pawn Shop business from the claims themselves and also to any associated 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 demand proper liability insurance.

The usual level of general liability insurance for your Pawn Shop 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 Pawn Shop insurance operations.

Professional liability insurance for your Pawn Shop business

In the event where a buyer alleges some negligence, errors, or omissions in how you conducted your Pawn Shop business for them, you can quickly face a law suit.

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

Every small Pawn Shop 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 Pawn Shop insurance section below for average prices of professional liability insurance for your Pawn Shop 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 you delivered didn’t meet your description of function, or that your guidance was basically incorrect.

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

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

To cover yourself against any following lawsuit, you need Product liability insurance for Pawn Shop

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

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

Commercial insurance

Commercial vehicle insurance for your Pawn Shop business

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

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

Also, in case of any accident, the car itself, the content and any legal bills, medical expenses, and property damage is covered if your car is involved in an accident.

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

The required value of the insurance depends on the depreciated value of the vehicle, and your intended level of cover of contents. 

Tools and Equipment insurance

Since your Pawn Shop business needs specific and expensive 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 unexpected acts.

As well, acts of nature like lightning strikes, hurricanes, earthquakes, and other highly damaging natural events can destroy your whole business in one stroke.

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

It is difficult to advise how much equipment insurance you need – it’s really dependent on how much you have invested in your Pawn Shop business’ equipment.

Commercial Property insurance

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

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

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

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

In other states like Rhode Island, where extreme cold snaps can cause damage to outer coverings of Pawn Shop business premises, there is a need for more extra 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 Pawn Shop insurance section below to give some idea of the average prices per million dollars of property insurance for your Pawn Shop business.

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

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

Using short-term insurance makes perfect sense. Business insurance by the month, day, or week – temporary insurance for Pawn Shop – 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 adequate risk cover.

The key feature of short-term insurance is that you purchase 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 larger business activity, get the existing cover raised.

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

Business Owners Policy BOP for your Pawn Shop business

You have the option to combine several 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 protect you if any claims of injury or property damage are made.

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

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

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

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

The usual business that can take out a BOP policy must have fewer than one hundred employees, and not more than five million dollars in annual sales.

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

Workers Compensation insurance for your Pawn Shop business employees

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

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

The benefits cover 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 required to pay penalties levied by the states.

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

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

Workers compensation premiums are calculated 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 Pawn Shop insurance level is unique, there are enough examples of average quotes from insurance companies for us to give appropriate 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 collected for the main types of insurance your Pawn Shop businesses needs.

Types of insurance Price range
Product liability insurance $291 – $558
Public liability insurance $317 – $574
Commercial insurance $916 – $2691
Commercial vehicle insurance $1857 – $2845
Equipment insurance $425 – $1411
General liability insurance $745 – $895

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

We have reckoned these figures for small self-employed Pawn Shop businesses.

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

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

You should talk to 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 useful source of information is the local Better Business Bureau in your suburb.

FAQ

What is small business insurance for Pawn Shop operations?

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

Does my Pawn Shop business have to have insurance?

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

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

What does a small Pawn Shop business insurance policy cover?

Liability insurance provides protection 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 recommended policies for Pawn Shop insurance.

How much will Pawn Shop business insurance cost?

As well as the size of the business, several 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.

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