Understanding Insurance for Hardware and Home Improvement Stores
Running a hardware store can be a challenging yet satisfying experience for business owners. The store owner gets to know the community better and can help customers with home improvement tasks. The high demand for homes and home renovation in the US keeps the home improvement stores busier than ever. At the same time, the increased customer traffic exposes the stores to more potential claims.
Business owners should invest in Home Improvement Store Insurance to protect their business against potential mishaps, accidents, and injuries at the store.
Risks and liabilities
Home improvement store owners have many responsibilities, such as maintaining inventory and sales records, hiring good employees and maintaining a safe store. Employees that can deal better with customers and take care of their needs for billing and account services. While store owners are busy with these tasks to make their business successful, there are several potential hazards for which they need insurance protection.
A customer slips on a wet floor and breaks their ankle, or a visitor gets injured from heavy inventory falling on them while reaching for a product on the shelf. In either case, the customer can sue the business for their injury, pain, suffering, and economic loss.
An employee could get physically injured when demonstrating the use of a power saw to the customer. Or, they may get a back/shoulder injury from the regular lifting of heavy equipment. The hardware store will need to bear the cost of the employee's medical care since the employee was hurt while working.
The employee may cause an unfortunate auto accident while delivering a product to the customer. Such accidents can lead to a substantial legal liability to the hardware store owner. These potential hazards make buying the right Hardware Store Insurance necessary.
Recommended Policies
Insurance for hardware stores should ideally provide coverage against third-party liability, property damage, employee injuries, and commercial vehicle liability.
Commercial Property insurance
A hardware store sells various products, some very expensive and others not, including paint, solvents, fertilizers, hardware, lumber, home appliances, power tools and other equipment. The store is also exposed to fire risks due to flammable inventory. Therefore, property damage can significantly impact business operations and profitability. Commercial Property Insurance provides coverage for repair or replacement against damage to real property, equipment, furniture, inventory, etc., for perils such as fire, tornado, vandalism, explosion, etc.
For instance, if faulty wiring leads to an electrical fire in a home improvement store, it damages the building and all its contents. Commercial Property Insurance will come in handy during such mishaps.
Workers’ Compensation Insurance
Home improvement store employees are exposed to many risks on the job, such as accidents involving the use of heavy equipment, slip and falls or just being clumsy. In such cases, Workers’ Compensation Insurance provides coverage for medical care, rehabilitation expenses and a percentage of lost wages if the employee cannot return to work for some time. In case of a fatal accident, it provides dependents payment for funeral expenses and death benefits.
Commercial Auto Insurance
Many hardware/home improvement stores operate delivery trucks and vans. Commercial Auto Insurance provides liability coverage when an employee is involved in an at-fault collision after running a stop sign. Bodily injury and property damage are covered for the not-at-fault car and its occupants. When comprehensive and collision coverage is purchased for the company-owned vehicles, the vehicle damage will be repaired or replaced if totaled or stolen, less the applicable deductible.
Business Owners' Policy (BOP)
A BOP provides coverage for general liability and property insurance.
Property Insurance
Property insures buildings and contents against damage from fire, tornados, vandalism, riots, explosion or loss from theft, to name a few. Other coverages are typically included on a BOP with low limits that can be increased, such as employee dishonesty, computer and electronic equipment, and business interruption coverage, depending on the store's needs. So, instead of buying these coverages separately, one can bundle all these coverages in a BOP to save on costs.
Business interruption coverage for Home Improvement Stores replaces lost income when a store has to close because the structural damage makes normal business operations impossible. Note that the damage must be due to a covered peril in the policy. Net income replacement allows the business to meet its financial obligations such as mortgage or rent payments, employee salaries, taxes, insurance premiums etc.
General Liability Insurance
General Liability Insurance is a crucial coverage that protects the business against claims of bodily injury to customers and damage to their property. For example, a home improvement store may have slippery floors due to design or being wet, along with the customer traffic, there is a high chance of slip-and-fall accidents and injuries.
Injury or property damage that happens to the customer after purchasing an item and using it at home would be covered under the product liability section of the general liability policy. Sometimes, a product sold by the business owner can cause customer injury. Even if the store didn't manufacture it, it could spell legal trouble for the hardware store owner. The injured customer may still make allegations of negligence. Product Liability Insurance offers coverage against legal liability due to a defective product that caused harm to the customer or the customer's property.
A customer's bodily injury claim or lawsuit can cost the business considerably. General Liability Insurance covers claims from third-party bodily injury or property damage. It also provides legal defense for covered claims where the hardware store is liable.
Comprehensive Insurance Costs
Pricing for Hardware Home Improvement Store Insurance will vary depending on several factors. These factors include the business's industry, annual revenue and payroll, the number of employees, location, building construction type, values insured and claim history. Insurance premiums will be higher for companies with higher revenue, insured values, and frequent claims history.
The bottom line
With many risks associated with a home improvement/hardware store business, it is imperative to have the right coverage to protect against liability lawsuits and property losses. In addition, comprehensive coverage can give peace of mind to the business owner that insurable events are covered, and their business's financial outlook is secure.