Used Clothing Store Insurance – Cost and Coverage

Whenever you budget the expenses of your business, used clothing store insurance must be high on the list because you can’t always know exactly what is going to happen in the future.

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With the protection provided by liability insurance and all the other sorts 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 used clothing store enterprise, you must consider how much financial danger you are taking on.

Business Insurance for used clothing store

If your used clothing store business runs without proper insurance, you are taking a giant 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 consequences of their actions. 

In this article, we are giving very general guidelines for small 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 used clothing store business?

What this means, for any used clothing store business owner, is that if some company 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 used clothing store 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 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 used clothing store operations, you can’t deny 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 an LLC, all of that liability belongs to you as an individual.

What does used clothing store insurance protect you from?

For your used clothing store 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 used clothing store business owner should know when negotiating the insurance needed.

The main headings of insurance for your used clothing store businesses are liability insurance, commercial insurance, asset insurance and workers compensation insurance.

Liability insurance

General liability insurance

Any used clothing store business is dealing directly with members of the public, and that means you always have the danger that some accident can happen to them themselves or else something of theirs can be ruined.

In such a case, they can demand compensation.

General liability insurance policy for your used clothing store business protects you against claims coming from injury to customers or damage to their property.

It protects your used clothing store business from the claims themselves and in addition to any follow-on 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 insist on proper liability insurance.

The usual level of general liability insurance for your used clothing store business would be with a upper limit of $1 million for a single event 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 used clothing store insurance operations.

Professional liability insurance for your used clothing store business

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

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.

Every small used clothing store 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 used clothing store insurance section below for average prices of professional liability insurance for your used clothing store 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 advice 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 liable for results caused by products claimed to be defective.

To cover yourself against any following lawsuit, you need Product liability insurance for used clothing store

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

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

Commercial insurance

Commercial vehicle insurance for your used clothing store business

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

The best 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 truck policies cover 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 insured if your van is involved in a collision.

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

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

Tools and Equipment insurance

Since your used clothing store business needs specialized and expensive equipment, you know 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.

Also, 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 used clothing store business running.

It is difficult to advise how much equipment insurance you need – it’s essentially dependent on how much you have invested in your used clothing store business’ equipment.

Commercial Property insurance

Any used clothing store business that owns or rents space in a building needs 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.

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

If your used clothing store business operates in areas of high risk, like Texas or North Carolina, supplementary coverage may be needed for earthquakes and hurricanes or tornadoes.

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

Whereas 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 used clothing store insurance section below to give some indication of the average prices per million dollars of property insurance for your used clothing store business.

Temporary insurance by month, week or day for your used clothing store business

Is your used clothing store 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 used clothing store – 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 key feature of short-term insurance is that you purchase 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 higher business activity, get the existing cover increased.

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

Business Owners Policy (BOP) for your used clothing store 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 combines commercial property and public liability insurance by packaging 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 frequently the right choice for small and medium-sized used clothing store businesses, such as yours.

There are some limits that will rule 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 permitted 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 turnover.

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 used clothing store business employees

In most states, it is mandatory to have workers compensation insurance when your used clothing store business has one or more employees.

Workers compensation insurance covers the business against any costs that arise if any hired hand 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 requirements in this regard can leave you as the employer having 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 take out your workers compensation obligations from private insurance corporations.

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 consult the relevant authorities in your state.

Average costs of these types of insurance

Although every used clothing store insurance need is unique, there are enough examples of standard quotes from insurance companies for us to give rough guidelines, including what are the cheapest rates offered.

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

The list below is of annual premiums we have researched for the main types of insurance your used clothing store businesses needs.

Types of insurance Price range
Commercial vehicle insurance $1760 – $3165
Equipment insurance $490 – $1260
General liability insurance $670 – $885
Commercial insurance $935 – $2510
Public liability insurance $370 – $535
Product liability insurance $235 – $560

Cost of insurance for your used clothing store operations depends on many different factors.

We have estimated these figures for small independent used clothing store businesses.

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

The location and size and type of your used clothing store 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 reliable source of information is the local Better Business Bureau in your city.

FAQ

What is small business insurance for used clothing store operations?

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

Does my used clothing store business have to have insurance?

Some of the kinds of insurance are not mandatory for you to run 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 used clothing store business insurance policy cover?

Liability insurance provides insurance against lawsuits or claims filed by a client 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 recommended policies for used clothing store insurance.

How much will used clothing store 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 talk to professional insurance agents and brokers, or insurance company representatives.

You can search for more information insurance for used clothing store, in the search box below, and follow the relevant links.

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