Consignment Store Insurance

Consignment and thrift stores are growing in popularity as the public learns there’s no huge difference between a brand-new and a gently used item. But if you run a consignment or thrift store, you'll need to ensure the right coverage protects it. No matter what kind of store you operate, it's vulnerable to risks ranging from theft to data breaches and beyond. 

An independent insurance agent can shop for the best business insurance for you in a similar way that you shop for your store's items. Independent insurance agents know the ins and outs of business insurance and have an understanding of the insurance needs that your business faces in your area. But first, let's dive deeper into the type of insurance your consignment or thrift store might need.

Consignment Store Stats

Consignment and thrift stores might be more popular than you'd expect, and their popularity continues to grow over time. Here are some quick stats about consignment stores in the U.S.

• Consignment stores have seen 7% growth annually over the last two years.
• There are more than 25,000 resale stores in the U.S.
• An estimated 12% to 15% of Americans shop at consignment stores every year.

Since the consignment store industry is still steadily growing, it's time to ensure your business is equipped with all the protection it needs against common and unexpected threats. 

Why Do Consignment Stores Need Insurance?

If you have a building, property, products, and employees, you need insurance. Consignment store insurance is designed to protect a business’s assets. Consider what would happen to your business and your finances if any of the following occurred:

• A fire burned down your store along with all the products inside
• A customer slipped and fell in your parking lot and sued you
• Someone broke into your store and stole a lot of your inventory
• A pipe broke inside your building and led to a temporary shutdown of your business
• A shelf collapsed in the store and severely injured a customer

These are just a few examples of risks that businesses of all kinds face on a daily basis. Having the right protection with a proper business insurance policy can help your business financially recover after a loss. 

Protect Your Clothing Store with Property Insurance

Half of the fun of buying secondhand items is the actual shopping. People have made careers out of teaching others how to shop in thrift and consignment stores, which is why you need commercial property insurance to protect the building that houses your products, as well as your inventory itself. 

Why your store needs property insurance:

Your clothing and other soft goods inventory are highly flammable. A fire in your thrift store could cause a total loss. 

Your inventory could also be destroyed by smoke or water. A fire in an adjacent store or a small fire in your stockroom could cause smoke or water damage that destroys all of your merchandise, as well as your fixtures, furnishings, and cash registers. 

Also, severe weather like a tornado can level a building. Even a severe thunderstorm could force a tree through your storefront window or cause a lightning strike that destroys all of your electronic equipment. 

In the event of a loss, the following types of property insurance could reimburse your business:

• Commercial property insurance: This insurance pays for damage that's done to the structure of your building or your inventory by natural disasters, theft, or vandalism. 
• Flood insurance: If your store is located somewhere prone to flooding caused by natural sources like heavy rain, it’s recommended that you purchase flood insurance to further protect your business property.
• Sewer backup insurance: This is typically added as an endorsement to a business insurance policy. However, it can pay to repair and clean up damage caused by sewer breakage or backups that impact your store.

An independent insurance agent can help you build the right kind of consignment or thrift store insurance policy for you.

Consignment and Thrift Stores Also Need Liability Insurance

Running a business without liability insurance is a risky move that usually doesn’t end in the business owner's favor. Anyone can file a lawsuit at any time, and general liability insurance can protect your business against the following:

• Bodily injury
• Property damage
• Medical payments
• Court costs and legal fees
• Personal and advertising injury

The following types of liability insurance could be beneficial to your consignment or thrift store:

• Premises insurance: If a shopper gets injured or suffers personal property damage while inside your consignment or thrift store, premises insurance will cover the costs.
• Product insurance: Depending on the type of products you sell, there’s a chance a customer could get injured by one of your products, which creates the need for this kind of coverage.
• Employment practices liability insurance: This covers your consignment or thrift store if an employee accuses your business of engaging in illegal employment practices, such as wrongful termination, sexual harassment, or discrimination.
• Cyber liability insurance: This insurance protects your business if a hacker breaks into your computer system and steals valuable customer information.

An independent insurance agent can help your consignment or thrift store get set up with all the liability coverage it needs. 

Additional Insurance Options for Consignment Stores

Property and liability insurance are the main concerns for any retail business, but there are a variety of additional insurance options that can protect your consignment store. When working with your independent insurance agent to get coverage, consider the following options:

• Business income insurance: Should your consignment store have to shut its doors temporarily after a covered disaster like a fire, this insurance will provide a continuation of income so you can continue to pay bills and employee salaries.
• Workers’ compensation insurance: Most states require that you provide protection for your employees should they get hurt or sick on the job.
• Commercial auto insurance: If your consignment store has any vehicles used for business purposes, they need to be insured under a commercial auto policy. 
• Group Health Insurance: If your business has at least 50 full-time employees, you are required to provide them with health insurance.
• Commercial umbrella insurance: This provides an important safety net for cases when a claim exceeds the coverage included in your general liability policy by extending your limit to $1 million or more. 
• Crime coverage: This protects your business from any number of crimes that could be committed in your thrift store, including vandalism, shoplifting, and employee theft or embezzlement. 
• Signage coverage: This pays for damage to outdoor signs that are not attached to your building when the damage is caused by weather, vandalism, fire, etc.

Working together with an independent insurance agent is the best way to ensure your consignment or thrift store gets set up with all the additional types of coverage it really needs.

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How Much Does Consignment or Thrift Store Insurance Cost?

A variety of factors go into determining how much your consignment store insurance costs. Every store's policy will vary due to a number of factors, including:

• The size of your business
• The weather and crime risks in the city where your store is located
• The value of your inventory and other business property
• The number of workers you employ
• Whether you offer additional services like delivery and installation
• The types of business insurance coverage you are purchasing
• The amount of coverage you need
• Your store’s claims history

A local independent insurance agent can obtain quotes on your behalf. That way, you can be sure that the policies you select are offered to you at reasonable prices.

How to Find the Best Insurance for Your Consignment Store or Thrift Store

Building your consignment store or thrift store insurance policy doesn’t need to be difficult. An independent insurance agent’s role is to do the hard work for you. They’ll explain the different policies and help you determine what will fit your unique business. 

The Benefits of Working with an Independent Insurance Agent

Independent insurance agents have access to multiple insurance companies, ultimately finding you the best business insurance coverage, accessibility, and competitive pricing while working for you. They'll match you to the policy that combines the best coverage and cost for your consignment or thrift store. Find an independent insurance agent in your community here.