When you think about opening a garment business, even a small one, you need to know about the clothing insurance, since the lack of insurance can cause you to close that business you dreamed of, perhaps due to a legal cause or damages that make you not get everything you invested back.
In fact, it is a cost that you should consider in the initial capital when opening the business, because in addition to knowing the types of insurance that are best for you to buy, you also need to know what the value of those insurance is, so …
What is the insurance for clothing and its cost
The cost of clothing insurance, it can mean an additional cost of cash for your company, but it also means a benefit because it is likely that you will avoid the cost of an incident that could end the opening of your business.
Although all companies, whether small or large, have almost the same risks, each one has special needs when it comes to insurance and therefore a clothing store is no exception, so you need:
Types of clothing insurance
Commercial property insurance
This is the type of insurance that protects you from damage to your business property including inventory and building. Keep in mind that clothing can be severely damaged by smoke, water or fire, an incident of this type can completely ruin the clothing and your entire inventory will be unusable.
Business interruption insurance
Business interruption insurance gives you the income that you would have received if your business had been permissive open during a season in which it is commonly a seasonal business, since clothing stores suffer a period of interruption.
Keep in mind that some commercial property damage insurance policies have an additional business interruption, therefore as a store owner of this type make sure that your policy has this provision or buy it separately.
Theft insurance
Your clothing store like any other business will be susceptible to theft, but a boutique is much more susceptible than other businesses, since clothing is very easy to hide.
Keep in mind that some commercial property policies already contain these provisions, your business needs it, therefore if it does not contain it, propose to buy it separately, since your business will be covered for losses or theft.
Liability insurance
Liability insurance is important because it protects your business and owners against unexpected accidents or incidents that financially harm your business.
The cost of clothing insurance
Regarding the cost of civil liability insurance, it has a very wide margin, since it is your decision to place a ceiling or cap on it, since they start from 500 dollars up to figures of thousands of dollars, but keep in mind that it will not be an expense but an expense. investment to protect your business.
In any case, you must bear in mind that each business is different as the needs are different, since there are factors that affect the cost of insurance, so it is not easy to estimate an exact cost.
Find an insurance company specializing in retail industry insurance and they will provide you with a quote based on the size and scope of your retail business.
You will need general business insurance, liability insurance, and worker’s compensation insurance, and you can consider inventory theft and damage insurance.
Annual insurance premiums can average between $ 500 and $ 2,000.
Boutique insurance
Even if your clothing boutique is small, you know that every time a customer enters your store, incidents, liability claims, spills on clothes, customer slips, trips on the rugs and even injuries can occur with one of your products. as customers can be accidentally damaged regardless of the security measures you take in your business.
It is for this reason that most retail business owners such as a clothing boutique choose to protect their retail business against unforeseen accidents, lawsuits, and oversights.
With the correct coverage, your retail business will be covered in the event that a disgruntled customer sues you for personal injury and decides to argue against your business. Keep in mind that even though the claim has no merit, appearing in court will take time and money that you have earned through your efforts if you do not have general liability insurance.
As for the cost of general liability insurance, it varies according to each business, since if you established your business as a sole proprietor, you can calculate an average of $ 500 per year, otherwise it could be as high as $ 3,000 per year.
BOP
Business owner policies include a BOP that protects the real estate assets of your company. Protect your business from the financial burden of the loss of physical business assets.
Exterior structures, Your clothing store building and inventory will be protected because the BOP protects your computers, mannequins, clothing racks and if your clothing store building was damaged due to a flood or storm, the insurance policy covers the payment for the repair of the building, the replacement or repair of the interior of the prosperity that was damaged.
The BOP protects you from the loss of important documentation such as electronic data, physical files of customers and covers you in the event of a disaster or loss of income from your accounts receivable and liability in the case of a dishonest employee.
Workers compensation insurance
As the owner of a clothing store with employees you will be an employer who as such must have workers compensation insurance for all your employees.
It is workers ‘compensation that pays for employees’ medical bills and related expenses if they are injured while working.
It is a type of insurance without failures, so neither you nor your employee must prove anything before the insurance takes over the employee benefit.
In the case of employee compensation insurance, the cost depends on each state in the United States, but the average cost is calculated per $ 100 in payroll, that is, for every $ 100 of the employee’s salary, the cost of insurance compensation ranges between 0.75 and 2.74 dollars, always depending on each state.