Clothing Store and Boutique Insurance

Several factors affect insurance premiums for clothing retailers during the underwriting process, such as:

• Services offered: The services you offer, such as custom tailoring, delivery, or an online customer referral and rewards portal, will affect how much you pay for insurance.
• Business property and equipment: It'll cost more to insure designer clothing or a high-end screen printing press than used clothing at a thrift shop.
• Annual revenue: Clothing stores that bring in more revenue usually have greater exposure to liability claims and other losses, which increases your insurance rates.
• Business location: Insurance costs can vary based on property values, litigation trends, crime rates, risk of severe weather, and other regional factors.
• Coverage limits and deductibles: Higher policy limits provide coverage for more expensive claims at a higher cost, while choosing a higher deductible lowers your premium. Remember, your policy won't activate until the deductible is paid.
• Claims history: Shops with previous insurance claims can expect higher rates than those with a clean history of claims.
• Number of employees: Each additional staff member increases your insurance premiums because they each bring the risk of an injury or lawsuit.

Businesses that sell clothing or other goods usually need a license and a seller's permit, though the specifics depend on your local regulations.

Here's what your clothes store likely needs to operate:

• Business license. Small business owners typically need a business license from their state, county, or city.
• Seller's permit or sales tax permit. In every state that collects sales tax, you need a permit from your state's tax or revenue agency in order to sell tangible goods.
• Home occupation permit (HOP). If you run an online store out of your home, you will need a HOP from your city to ensure it won't negatively impact your neighborhood.

Keep in mind, your business must also comply with local ordinances, zoning laws, and Occupational Safety and Health Administration (OSHA) regulations.

If someone stumbles into a clothing rack, gets scratched by a fitting room door latch, or trips on an uneven step, your general liability policy will pay for their medical treatment. General liability also covers costs if a customer's property was damaged, or if they file a lawsuit over an incident that harmed them.

In addition to third-party bodily injuries and property damage, general liability insurance covers personal and advertising injuries, such as:

• Invasion of privacy: An employee posts an image of a customer without their permission on your shop's social media page.
• False arrest: A security guard detains an innocent customer and accuses them of stealing merchandise from your store.
• Defamation: One of your employees slanders a competitor at a networking event or makes a libelous claim about them on Twitter.
• Copyright infringement: Your shop is sued for having the same name as an existing retailer or a logo that's too similar to theirs.

Due to the high cost of medical bills and litigation, you might need to show proof of liability insurance to a landlord, lender, franchise owner, or e-commerce platform when you enter into an agreement with them.

Shoplifting and burglaries are big risks when you have a storefront. That's especially true if you sell items with high resale value, such as jeans, designer handbags, or children's clothing.

There are a couple of crime insurance policies that can help you recover your financial losses, including:

• Commercial property insurance: This policy covers destroyed, damaged, and stolen property, including shoplifted items. It's also called business hazard insurance.
• Employee dishonesty coverage: Also called a fidelity bond, this coverage provides reimbursement for employee theft from your store or your customers.

Security systems and other loss control measures can help prevent theft, and can even save you money on your property insurance. Check with your insurance company to see if they offer a discount on your premium for certain precautions.

Keep in mind, seeking reimbursement for shoplifting will affect your claims history and may raise your insurance rates. Most shop owners report only larger burglaries to avoid a premium increase.

It's easy to find affordable retail business insurance with Insureon. Our easy online application lets you compare quotes from trusted insurance companies to find policies that fit your budget and your unique risks.

Other ways for clothing store owners to save money on insurance include:

• Bundle policies. You can often save money when you purchase two or more types of coverage together from the same provider.
• Pay the annual premium. Insurance companies usually offer a discount when you pay the annual premium in full instead of making monthly payments.
• Customize your coverage options. Choose lower limits or a higher deductible to reduce your premium, but make sure your coverage is sufficient to cover a claim and that you can afford to pay the deductible in a crisis.
• Avoid accidents and claims. Policyholders can prevent employee injuries and customer accidents that lead to claims by training employees, installing a security system, and implementing other risk management strategies. A clean claims history helps keep your premium low.

Our insurance agents can help you find the right insurance solutions for your business, whether you sell T-shirts, luxury clothing, handbags, wedding dresses, or any other type of merchandise.