Starting and operating a hardware store involves managing many moving parts, from stocking diverse inventory and maintaining equipment to ensuring the safety of employees and customers. One critical aspect often overlooked is the necessity of adequate business insurance to protect the store from potential risks and liabilities. This article will guide you through the unique risks associated with running a hardware store, the various insurance coverages necessary, and factors that influence insurance costs. It will also provide you with helpful tips on reducing your insurance premiums and choosing the right insurance provider.
- 5 best hardware store insurance companies
- Understanding the unique risks associated with hardware stores
- Essential insurance coverages for hardware stores
- Should hardware stores consider Business Owners Policy (BOP) insurance?
- How much does hardware store insurance cost?
- Tips to reduce insurance costs for your hardware store
5 best hardware store insurance companies
Choosing the right insurance provider for your hardware store can be a daunting task, given the variety of options available in the market. It is crucial to find a provider that understands the unique risks associated with running a hardware store and offers tailored coverage that protects against these risks. The following are five top insurance providers that offer customized insurance solutions for hardware stores. Each provider has its strengths and specializations, so you can find the one that best fits your business needs. Whether you prefer a streamlined online experience, personalized service from local agents, or a well-established name in the insurance industry, these providers have you covered. Let’s delve into a detailed overview of each.
- Simply Business: Best brokerage firm to work with to compare several quotes of all types of hardware shop insurance coverage
- NEXT: Best general liability insurance for hardware stores
- State Farm: Best commercial property insurance for independent hardware shops
- The Hartford: Best BOP insurance for hardware stores
- Tivly: Best brokerage firm if you prefer working with a local independent and knowledgeable agents
Simply Business: Best brokerage firm to work with to compare several quotes of all types of hardware shop insurance coverage
When it comes to hardware store insurance, comparison shopping is crucial, and Simply Business makes it easy. This online brokerage firm works with a variety of top-tier carriers, offering a platform where hardware store owners can compare several quotes for all types of coverage needed. Whether it’s general liability, property insurance, or workers’ compensation, Simply Business can streamline the search.
Pros:
- Wide range of insurance types offered.
- Simplified online process makes comparing quotes easy.
- Access to many top-tier insurance carriers.
Cons:
- Not a direct insurance provider; acts as a middleman.
- Customer service quality might vary depending on the specific carrier chosen.
NEXT: Best general liability insurance for hardware stores
NEXT Insurance offers robust general liability coverage designed specifically for businesses like hardware stores. With policies that cover bodily injury, property damage, and personal and advertising injury, NEXT is an excellent choice for hardware stores wanting to protect against common risks.
Pros:
- Specializes in general liability coverage, which is critical for hardware stores.
- Online platform makes buying and managing policies straightforward.
- Offers flexible payment options.
Cons:
- Does not offer as wide a variety of other insurance types compared to some other providers.
- Newer company, may not have the long track record of some competitors.
State Farm: Best commercial property insurance for independent hardware shops
State Farm is a trusted name in insurance, and their commercial property policies stand out for independent hardware shops. Their coverage can be customized to include buildings, business personal property, business income, and extra expense, making it a comprehensive choice for hardware store owners.
Pros:
- Extensive customization options for commercial property insurance.
- Well-established and reputable insurance provider.
- Wide network of local agents for personalized service.
Cons:
- Online quote process is not as streamlined as some competitors.
- Some coverage types may need to be purchased separately.
The Hartford: Best BOP insurance for hardware stores
The Hartford is known for its robust Business Owners Policies (BOP), which bundle critical coverages like property insurance and general liability into one package. For hardware stores, this comprehensive approach ensures protection against a variety of risks, from property damage to customer injuries.
Pros:
- Expertise in providing comprehensive BOPs.
- A long-standing reputation for strong customer service.
- Additional coverages can be added to customize policies.
Cons:
- Some specialized coverages might not be available.
- Rates may be higher than some competitors.
Tivly: Best brokerage firm if you prefer working with a local independent and knowledgeable agents
Tivly is an excellent choice for hardware store owners who value personalized service. As a brokerage, Tivly connects businesses with local, independent agents who understand the unique insurance needs of hardware stores. They can guide store owners to the best coverage options for their specific needs.
Pros:
- Offers personalized service through local, independent agents.
- Can provide access to a variety of insurance carriers and policies.
- Knowledgeable about the specific needs of hardware stores.
Cons:
- As a broker, may not have as streamlined a process as direct insurers.
- The quality of service can vary depending on the specific agent.
Choosing the right insurance provider for your hardware store
Choosing the right insurance provider is as essential as having the right coverage.
Importance of industry-specific experience
Choose a provider with experience in insuring hardware stores. They’ll understand your business’s unique risks and can offer suitable coverage options.
Understanding policy terms and exclusions
Make sure you fully understand the terms of any policy you’re considering, including any exclusions, so you’re aware of what is and isn’t covered.
Customer service and claims handling
Check reviews and ratings for the insurer’s customer service and claims handling process. Prompt and helpful service can be invaluable when you need to make a claim.
Comparing quotes from different providers
Get quotes from multiple providers to compare coverage options and costs. Don’t just go for the cheapest option – consider the value and suitability of the coverage offered.
Understanding the unique risks associated with hardware stores
Hardware stores face several unique risks due to the nature of their operations and the products they sell. Understanding these risks helps identify the right insurance coverages needed for comprehensive protection.
Risk of employee injuries
Hardware stores often stock heavy items that could lead to injuries during lifting or if they fall. Employees can also get injured while using equipment, such as forklifts, or from slips and falls.
Risk of customer injuries
Customers could get injured by tripping over equipment, slipping on a wet floor, or being struck by falling merchandise. There’s also the risk of customers getting injured while using products purchased from your store.
Risk of property damage
The property can suffer damage due to various incidents, including fire, theft, vandalism, or natural disasters. Equipment used in the store could also break down, leading to costly repairs or replacements.
Risks related to inventory
Inventory can be stolen or damaged in a fire, flood, or other disasters. Given the wide range of products hardware stores carry, such losses can be significant.
Risks associated with delivery and transportation
If your store offers delivery, there are additional risks involved, including vehicle accidents, damage to goods during transit, or injuries to third parties during delivery operations.
Essential insurance coverages for hardware stores
Given the unique risks faced by hardware stores, several types of insurance coverages are essential for comprehensive protection.
General liability insurance
General liability insurance policy covers costs related to third-party bodily injuries or property damage that occur on your premises. For example, if a customer slips on a wet floor in your store and gets injured, this policy would cover their medical bills and any legal costs if they sue your business.
Commercial property insurance
Commercial property insurance covers damage to your store’s physical structure and contents due to covered perils like fire, theft, vandalism, or certain natural disasters. For instance, if a fire breaks out in your store, this policy would cover the costs of repairing the building and replacing damaged inventory.
Workers’ compensation insurance
Workers comp insurance is mandatory in most states and protects your employees if they get injured or fall ill due to their work. It covers medical expenses and a portion of lost wages. For example, if an employee injures their back while lifting heavy inventory, workers’ compensation insurance would cover their medical costs and lost wages during recovery.
Commercial auto insurance
If your store owns vehicles for deliveries or other business purposes, commercial auto insurance is crucial. It covers damages resulting from vehicle accidents, whether to your vehicle, driver, or third parties involved.
Business interruption insurance
Business interruption coverage, often part of a business owner’s policy (BOP), compensates for lost income and operating expenses if your store must close due to a covered event, such as a fire or a natural disaster.
Equipment breakdown insurance
Also known as boiler and machinery insurance, this coverage pays for repair or replacement of store equipment that breaks down due to power surges, motor burnout, boiler malfunction, etc.
Product liability insurance
Product liability coverage is essential for hardware stores due to the potential risk of selling faulty products. If a customer is injured by a product bought from your store, this insurance would cover the legal costs and any resulting settlement or judgment.
Should hardware stores consider Business Owners Policy (BOP)?
Hardware stores should definitely consider a Business Owners Policy (BOP). A BOP is a type of insurance policy that bundles several important coverages into one package, typically including general liability insurance, property insurance, and business interruption insurance. Here’s why a BOP is a wise consideration for hardware stores:
Comprehensive coverage:
Hardware stores face several different risks. These can include property damage from incidents like fires or storms, liability claims from customer injuries or damage to customer property, and financial loss due to business interruptions. A BOP provides coverage for all these scenarios in one policy.
Cost-effective:
Buying insurance coverages separately can be more expensive than purchasing a bundled policy. A BOP is often a more cost-effective way to obtain the broad range of coverage that a hardware store requires.
Customizable:
A BOP can often be customized to meet a business’s specific needs. For example, if a hardware store offers delivery services, they might add commercial auto insurance to their BOP. This flexibility allows businesses to tailor their insurance package to their unique risks and operations.
Simplicity:
Managing multiple insurance policies can be complex and time-consuming. With a BOP, business owners have a single policy, a single premium, and a single renewal date, which simplifies the insurance management process.
Overall, while a BOP is an excellent starting point for many hardware stores, it’s always important to discuss your specific risks and needs with an insurance professional to ensure your business is adequately protected.
Understanding the hardware store insurance coverage: Case scenarios
Understanding insurance coverage can be complicated. Here are a few examples to illustrate how different types of insurance work in practical scenarios.
Employee injury coverage for hardware stores
Suppose an employee of your hardware store injures their back while lifting a heavy box of tools. Your workers’ compensation insurance would cover the employee’s medical bills and a portion of their lost wages during recovery.
Customer injury coverage for hardware stores
Imagine a customer trips over a loose piece of flooring in your store and breaks their arm. Your general liability insurance would cover their medical expenses and any legal fees if the customer decided to sue for damages.
Commercial property damage coverage for hardware stores
In the event of a fire at your hardware store, property insurance would cover the cost of repairing or rebuilding your store, as well as replacing damaged inventory.
Delivery accident coverage for hardware stores
If one of your store’s delivery trucks is involved in an accident while transporting goods to a customer, your commercial auto insurance would cover the cost of repairs to your truck, any third-party property damage, and medical costs for any injured parties.
How much does hardware store insurance cost?
The most common insurance coverage that all hardware stores need to have is general liabilty insurance. This coverage is often required by all hardware store chains or by the landlords when you lease a space for your store.
The average cost of a general liability insurance policy for hardware stores is $67 per month, or $804 a year. Most hardware stores pay between $36 to $125 per month for their general liability insurance policies.
The insurance cost for hardware stores depends on several factors that we are discussing in details below.
Keep in mind that these are just the averages. Be sure to shop around with a few companies or work with a top broker like Simply Business or Tivly to compare several quotes to find the cheapest one for your store.
Factors that influence the cost of hardware store insurance
Several factors can influence the cost of your hardware store insurance, including:
Location of the hardware store
The location of your hardware store can significantly impact insurance costs. Stores in areas prone to severe weather, such as hurricanes or floods, may face higher property insurance premiums. Additionally, businesses in urban areas with higher crime rates may also pay more for their insurance coverage.
Size of the hardware store
The size of your hardware store, both in terms of square footage and the number of employees, will affect your insurance cost. Larger stores typically have more assets to protect and may require more extensive coverage. If your store has many employees, your workers’ compensation insurance costs may also be higher.
Type of products sold
The types of products you sell can also influence your insurance costs. For instance, if your hardware store sells high-risk items such as power tools or hazardous materials, your liability insurance costs may be higher due to the increased risk of customer injuries or damages.
Business revenue
Insurance companies may also consider your business’s revenue when determining insurance premiums. Higher revenue usually indicates a more successful business, which could potentially face larger liability claims. As a result, businesses with higher revenues might pay more for their insurance.
Safety measures and loss history
Implementing safety measures can lower your risk profile and potentially reduce your insurance costs. This could include things like installing a security system or implementing a comprehensive safety training program for employees. Conversely, a history of many claims or losses can lead to higher insurance premiums.
Insurance deductible
The deductible is the amount you agree to pay out-of-pocket before your insurance coverage kicks in. Choosing a higher deductible can lower your insurance premiums because you’re assuming more of the financial risk. However, it’s important to choose a deductible that your business can comfortably afford in the event of a claim.
Remember, every insurance provider uses different factors and calculations to determine premiums, so it’s a good idea to shop around and compare quotes from multiple providers.
Tips to reduce insurance costs for your hardware store
While insurance is an essential investment for any hardware store, there are ways to minimize the costs:
Implement safety protocols
Having clear safety protocols and regular staff training can reduce the risk of accidents and injuries, potentially lowering insurance costs.
Install security systems
Security systems can deter theft and vandalism, potentially reducing your property insurance premiums.
Regularly maintain equipment
Well-maintained equipment is less likely to break down, which can reduce claims on your equipment breakdown insurance.
Choose a higher deductible
Opting for a higher deductible can lower your premium. However, ensure you can afford the deductible amount if you need to make a claim.
Bundle insurance policies
Many insurers offer discounts for bundling multiple policies, such as property insurance and general liability insurance, into a business owner’s policy.
FAQs about hardware store insurance
What is a Business Owners Policy (BOP) and why is it important for a hardware store?
A Business Owners Policy (BOP) is a type of insurance policy that bundles several important coverages, such as general liability, property insurance, and business interruption insurance, into one package. It is important for a hardware store because it provides comprehensive protection against various risks, like property damage, customer injuries, and loss of income due to business interruption.
Does hardware store insurance cover theft?
Yes, a typical hardware store insurance policy, particularly one that includes commercial property insurance, can cover theft of inventory or other business property. However, it’s essential to confirm this with your provider as terms can vary.
How much does hardware store insurance cost?
The cost of hardware store insurance can vary significantly based on various factors, including the location and size of the store, the types of products sold, business revenue, safety measures in place, loss history, and the chosen insurance deductible.
Do I need workers’ compensation insurance for my hardware store?
If you have employees, most states require you to have workers’ compensation insurance. This insurance covers medical expenses and a portion of lost wages if an employee gets injured or becomes ill due to their job.
Does hardware store insurance cover damage to my business vehicles?
A standard hardware store insurance policy may not cover business vehicles. For that, you would need a commercial auto insurance policy, which can be added to your insurance package. It covers damage to your vehicles due to accidents, theft, and other perils.
How can I reduce the cost of my hardware store insurance?
You can potentially reduce the cost of your hardware store insurance by implementing safety measures to lower your risk profile, choosing a higher deductible, bundling your policies with one insurer, and shopping around to compare quotes from multiple providers. Always consult with your insurance professional to understand the best cost-saving measures for your specific business.
If customers buy a product from a hardware store, the product is defective and causes bodily injury to the customers and they sue the hardware store, does hardware store insurance cover this lawsuit?
Yes, the general liability portion of a hardware store insurance policy usually covers claims related to customer bodily injury. If a product sold by a hardware store is defective and causes harm to a customer, the customer may sue the store for damages. In this case, the general liability insurance can help cover legal fees, court costs, and any settlements or judgments the store might be required to pay.
However, it’s important to note that this coverage typically applies to situations where the hardware store is deemed responsible for the injury due to negligence or other factors. It may not cover situations where the product manufacturer is found to be at fault. In these cases, the product manufacturer’s product liability insurance should come into play.
As such, do hardware stores need their own product liability insurance?
Hardware stores, like any retailer, can benefit from having their own product liability insurance. While general liability insurance does cover bodily injury and property damage that may result from products sold, there can be circumstances where having dedicated product liability insurance provides additional protection.
Product liability insurance specifically covers the business against claims related to the manufacture or sale of products, food, medicines, and other goods to the public. It covers the retailer’s liability for losses or injuries to a buyer, user, or bystander caused by a defect or malfunction of the product, and, in some instances, a faulty design or a failure to warn.
While a hardware store may not manufacture the goods it sells, it can still be held liable under certain circumstances. For instance, if the store sold a product it knew or should have known was defective or dangerous, it could potentially be held responsible along with the manufacturer.
Therefore, although not always legally required, product liability insurance can be a beneficial part of a hardware store’s risk management strategy. As always, it’s advisable to discuss specific insurance needs and options with a knowledgeable insurance agent or broker.
Conclusion
Protecting your hardware store with the right insurance coverage is a crucial part of successful business management. Given the unique risks associated with hardware stores, from potential injuries to property damage, it’s essential to secure a range of insurance policies tailored to your specific needs. By understanding the various types of coverage available, assessing the factors that influence insurance costs, and implementing strategies to reduce premiums, you can ensure your store is well-protected without overspending. Remember, the right insurance provider can make all the difference, so take the time to compare options, understand policy details, and choose a provider with excellent customer service and a smooth claims handling process. Armed with the right information and coverage, you can focus on what you do best – running your hardware store and serving your customers.
