Consignment Shop Insurance

Running a consignment shop, like any other business, means that there is a potential for liability. To protect yourself in the case of a customer injury, faulty products, litigation, fire and many other bad events, you need to have a good small business insurance policy. Without proper coverage, your business can be at risk from the costs of medical bills, repairs, and litigation.

General Liability Insurance for Consignment Shops

General Liability (GL) insurance is your go-to when it comes to basic coverage for accidents or incidents that happen in your store. It’s designed to protect you from those unexpected lawsuits that can come from a simple slip-and-fall accident or a claim that your advertising somehow hurt someone’s reputation.

General Liability Includes:

Premises Liability – Because you have customers coming in and out of your shop, you need protection in your business insurance in case someone is injured on the location. For instance, if a customer slips and falls on a newly cleaned floor in your store, this coverage will help with any resulting medical expenses. This will also cover costs of repair or replacement of personal property of others.
Products Liability – This type of coverage is especially important for a consignment shop. You are in the business of selling products and if one is faulty or causes injury, you will need protection through your commercial business insurance policy. This will cover expenses for medical care or damages caused by one of your products.
Completed Operations – Another part of the general liability portion of your business insurance is completed operations. This protects you from claims that arise after business has been conducted. If a customer complains about a product well after they have bought it, this can cover any associated damages.

Business Owners Insurance Policy

To purchase a tailored package of commercial insurance for your consignment shop, you will likely get a business owners policy, or BOP. A BOP is a set of coverages that cover your specific needs as a shop owner. It will automatically contain general liability coverage, but the rest will be up to you. Examples of some types of coverage that you may select for your BOP are:

Buildings and Contents
Business Income and Extra Expense
Electronic Data
Newly Acquired or Constructed Buildings
Employee Dishonesty Coverage

Claim Example: A fire breaks out after hours, damaging several pieces of high-end furniture and clothing. With BPP coverage, you can file a claim to cover the cost of replacing the damaged items and get back to business without missing a beat.

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Workers Compensation Insurance

With a shop, you probably employ one or more employees. You should have workers compensation as part of your commercial insurance to cover medical costs, lost wages, and any other expenses that may arise if one of your employees needs it. This coverage extends to any employee who is injured or becomes ill during the course of business.

Claim Example: An employee is rearranging a heavy display and throws out their back. Workers' comp steps in to cover their medical bills and provides some income while they recover. This protects both your employee and your shop from major financial headaches.