Bike Shop Insurance: Cost & Quotes From $13/month

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As a bike shop owner, you offer countless products and services to cycling enthusiasts. You either sell replacement parts or customize bicycles. You might even offer specialized services, particularly the repair and maintenance of customers' bikes.

Regardless of your business model and the types of products and services you offer, you need to protect your business. This is where bike shop insurance comes in.

This is important because, like other small business owners, it's your responsibility to protect your shop from unexpected events and third-party lawsuits. For example, a bike rental business you once catered to might come back and accuse you of selling defective bikes.

Also called bike repair shop, cycle shop, or bicycle shop insurance, bike shop insurance is an insurance product that consists of different business insurance policies, which function to cover specific commercial exposures. With this guide, understand how the insurance works, how much it costs, and more.

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Bike Shop Liability Insurance

There are many types of bicycle repair shop insurance that you can consider. The first is bike shop liability insurance. This specialty cycle shop insurance is a general liability insurance policy that protects your bike shop from incidents of accidental third-party property damage, advertising injury, and bodily harm.

Your cycle shop thrives on having a number of customers visiting your shop and possibly even trying out some of the bikes you have on display. Unfortunately, there's a chance that one of these customers will get hurt. If they file a personal injury claim, the bike shop general liability insurance will help you pay for the medical expenses of the claimant. Additionally, it covers the legal expenses that will arise as a result of your business getting sued.

If a technician of your bike shop damaged the bicycle instead of fixing it and the owner decides to file a claim, you can use general liability insurance to refund the value of the damaged property. Coverage for legal expenses applies if the matter is taken to court.

Further, imagine a situation where you put up an advertisement campaign to promote your bicycle business. Suppose you unknowingly use the work of an artist who then claims copyright infringement and takes you to court. In that case, the general liability insurance will cover the legal expenses and possibly pay for the fines you'd incur.

Professional Liability Insurance for Bike Shops

Customers can also sue your bike shop with regards to how a service was delivered or completed. And to cover this exposure, you need to purchase professional liability insurance. This type of bike shop business insurance will cover administrative costs, attorney fees, settlements, and other legal expenses if a client files a claim because your bike shop’s employee or you yourself committed any of the following:

• Negligence

• Misrepresentation

• Violation of good faith

• Violation of fair dealing

• Breach of confidentiality

• Other acts considered errors and omissions

Professional liability insurance for bike shops is underwritten as a claims-made policy. Claims-made professional liability insurance only provides coverage if you report a covered peril within the time it happened. Any long delays in filing a claim will result in the denial of your professional liability insurance claim.

If it seems that claims-made professional liability insurance doesn’t work too well, then we recommend you look for a carrier that sells an occurrence professional liability insurance for bike shops.

An occurrence professional liability insurance, unlike its claims-made counterpart, provides coverage regardless if you decide to report a covered peril at the time it happened or long after it has happened. The only thing important is that the policy is in effect when the exposure occurred. Also, you need to know that you can even claim professional liability insurance after its terms have expired, provided that an extending reporting period has been endorsed.

For the best protection, consider having general liability insurance and professional liability insurance. These policies complement very well. By having both, you get comprehensive protection against common third-party claims.

Bike Shop Product Liability Insurance

Suppose you sell a part from your bike shop to a customer who ends up using the part in their bike only for him or her to have an accident and sustain injuries. Product liability insurance will pay for the legal fees for such lawsuits and cover the settlements on your behalf if this customer was to sue your business for selling a product with:

• Manufacturing errors

• Design errors

• Labeling errors

Note that while you can buy it as a stand-alone policy, product liability insurance is commonly sold as an optional coverage to general liability insurance.

Cyber Liability Insurance for Bike Shops

To stay competitive in today's business landscape, you've got to take your business online. Unfortunately, the online landscape is subject to data breaches, hacks, and other activities by threat actors that could lead to significant financial losses. Cyber liability insurance covers these financial losses ensuring that your business's information and that of your customers are kept safe.

Bike Shop Commercial Property Insurance

To protect your hard work and business, you want to get commercial property insurance to cover your merchandise, equipment, and your business premises. Seeing as you are likely going to be using flammable substances for your maintenance and repair work, you will have significant peace of mind that you won’t incur losses for any unexpected damage to your commercial property. 

So what does commercial property insurance specifically do for you? The primary 

function of this type of business insurance is to recover your lost investments if any of the two happens:

• Your bike shop’s building sustains damage due to fire, theft, vandalism, and other covered perils

• Your bike shop’s building is totally destroyed by fire or extreme weather. Note that in this case, commercial property insurance can refund the value of the building or have it rebuilt from the ground up

Equipment and merchandise are also covered by commercial property insurance, provided that you include the following add-ons to its terms:

• Stocks and contents coverage-Stocks and contents coverage will cover losses if items in your inventory and bike shop furniture or installations become lost or destroyed due to fire, theft, vandalism, and other covered perils 

• Business equipment and tools coverage-If compressors, wrenches, grinders, and other equipment or tools become damaged or lost due to fire, theft, vandalism, and other covered perils while on the premises of your bike repair shops building, business equipment, and tools coverage will recoup lost investments on your behalf 

You must understand that commercial property insurance excludes the destruction or damage of your bike shop’s building, inventory, equipment, and tools as caused by earthquakes, floods, and mudslides.

Also, commercial property insurance is sold as a replacement cost policy or actual cash value policy. A replacement cost commercial property insurance will refund losses based on a covered property's original value. On the other hand, its actual cash value counterpart will recover losses based on the depreciated value of a covered property. 

Bike Shop Worker’s Compensation Insurance

Consider a scenario where your bicycle shop's employees sustain injuries or diseases because of lifting heavy objects, continuous exposure to chemicals, or poor workplace environment. 

In such a situation, your business needs to provide compensation. And to avoid using business funds, it’s smart to get workers' compensation insurance.  Workers' compensation insurance takes care of the following:

• Medical expenses-Common injuries in bike shops are cuts, burns, and lacerations. As for diseases, common ones are those caused by continuous exposure to substances such as dermatitis, rashes, and hand and nail infections. If an employee sustains any of these, workers' compensation insurance provides the money to be used for surgeries, therapies, and other medical expenses 

• Hospitalization-Workers compensation insurance covers hospital bills if your employee needs to be admitted for days, weeks, or months to receive intensive care for a work-related injury or disease

• Medication-You can use workers' compensation insurance to get the funds an employee needs to buy the prescription medicines for a work-related injury or disease 

• Rehabilitation-Workers compensation insurance will cover the rehab expenses of an employee who experiences temporary or permanent impairment due to a work-related injury or disease

• Lost income compensation-If your bike shop’s employee can’t work due to a work-related injury or disease, workers compensation insurance will cover the income he or she would’ve earned. This coverage for lost income is a weekly allowance equal to two-thirds or 67% of the average weekly wage. For example, if your employee earns $1,399 per week, then coverage for lost income will be $937.33

• Death benefits-Accidents can happen in your bike shop and an employee might die because of them. In such a situation, workers' compensation insurance will cover the deceased’s funeral expenses. His or her dependents  will also receive an allowance

Understand that workers' compensation insurance is a requirement if your bike shop formally employs one or more people. Failure to get insurance will result in hefty penalties or fines, particularly:

• Stop-hold order

• Imprisonment in the county jail

• Revocation of exclusive remedy

• A fine equal to twice you would’ve paid for workers comp insurance premiums

• A fine multiplied by the number of days your bike shop didn’t purchase workers' compensation insurance

You need to know that workers' compensation insurance is one of the most expensive business insurance. Of course, we know you want to save on costs. One way to do so is to get workers comp insurance as a pay-as-you-go policy. 

The standard workers' compensation insurance calculates premiums based on your business’s annual projected payroll. The drawback with this is that rates are not very accurate and too expensive. Pay-as-you-go workers' compensation insurance solves this problem. It calculates your rates based on the monthly average payroll of your bike shop. 

Bike Shop Personal Accident Insurance

A policy that’s sometimes confused with workers' compensation insurance is personal accident insurance. But note that this business insurance only covers the medical expenses or funeral costs of an employee that sustained an injury due to an accident in your bike shop. It’s a good idea to get personal accident insurance even though you already have workers comp.

Bike Shop Commercial Crime Insurance

Bike shops are extremely susceptible to crime, seeing as bikes are often targeted by thieves as they often attract attractive resale values. Moreover, you might end up with employees who occasionally take a few bills from the cash register. Having commercial crime insurance protects your bike shop from said theft, burglary, and other crimes committed both by your employees and third parties. 

Commercial Auto Insurance for Bike Shops

Does your bike shop own a vehicle used for delivering repaired bikes to clients or other business purposes? In this case, consider getting commercial auto insurance. Commercial auto insurance is a policy comprising different coverages that caters to the perils associated with using a commercial vehicle. Your bike shop commercial auto insurance will have:

• Auto liability coverage-Auto liability coverage will compensate third parties who sustained injuries or property damage due to the accident your bike shop’s commercial vehicle caused. It will also pay for legal expenses such as administrative costs, settlements, and attorney fees

• Physical damage coverage-Physical damage coverage will pay for the parts repair or replacement if your bike shop’s commercial vehicle sustains damage. This is actually sold as a comprehensive or collision policy. If bought as a collision policy, then physical damage coverage will cover parts repair or replacement costs if your commercial vehicle sustained damage after colliding with another car or object. If bought as a comprehensive policy, physical damage coverage will pay for parts repair or replacement if fire, theft, vandalism, or weather damaged your commercial vehicle

• Rental reimbursement coverage-Rental reimbursement coverage will refund expenditures if you need to rent a vehicle while your bike shop’s car is being repaired 

• Medical payments coverage/personal injury protection-Personal injury protection and medical payments coverage will cover the ambulance fees, emergency treatment, and other medical expenses of the driver and passengers who got injured after your bike shop’s commercial vehicle caused an accident or got involved in an accident. You don’t need to get both. If you're in a “no-fault” state, then what you need to have is personal injury protection. On the other hand, you need medical payments coverage if you’re in a “fault” state

• Uninsured/underinsured motorist coverage-Uninsured/underinsured motorist coverage will fill in and cover the resulting expenses if the driver who caused an accident can’t compensate your losses because he or she doesn’t have enough insurance or doesn’t have insurance to begin with 

Bike Shop Garage Keepers Insurance

Does your bike shop admit bikes of clients that take a considerable amount of time to service? If this is the case, then think about how problematic things can get if such bikes become damaged or destroyed while in your custody due to theft, fire, or vandalism.  To protect yourself against losses, consider buying garage keepers insurance. 

Garage keepers insurance is a specialty insurance product made for bike shops, car repair businesses, boat repair businesses, and more. In practice, this insurance will refund aggrieved parties whose bikes got damaged under your custody. 

Business Interruption Insurance for Bike Shops

Suppose there's extreme weather and part of your property is damaged. You might be required to close up shop for some time to repair said damages. Having business interruption insurance will help in such a situation. In practice, what this insurance does is provide the money you can use to cover operational costs such as taxes, loans, bills, and mortgage while business revenue isn’t generated.

Business Owner's Policy for Bike Shops 

Suppose you want to combine your general liability, commercial property, and business interruption policies into a single cover. A convenient option is a business owner's policy (BOP) which not only aggregates these but also ensures that your premiums are significantly cheaper. 

But note that your business owner’s policy might work differently. While a BOP commonly combines business interruption insurance, general liability insurance, and commercial property insurance, it’s also possible for you to find a BOP that includes the other business insurance policies we discussed here. 

Bike Rental Shop Insurance

Bike rental shop insurance is a specialty coverage useful if your shop is providing bike rental services. Common inclusions are general liability insurance and equipment insurance. General liability insurance will cover costs if renters sustain injuries or property damage due to a rented bike. On the other hand, equipment insurance will recoup lost investments if renters damage or destroy the bikes of your business. 

Bike Shop Insurance Cost 

The cost of your bike shop insurance policy will depend entirely on your needs. Fortunately, a lot of the insurance providers with this specialty policy are flexible enough to adapt their premiums to fit your bike business requirements as well as your budget.

On average, a $1 million general liability insurance for bicycle shops will cost $33.56 per month or $402.72 per year. But note that this is just an estimate. Your actual rate will be cheaper or more expensive depending on revenues, number of employees, claims history, business history, and location. 

Here's a breakdown of the bike shop insurance cost from the best insurance companies in the market today. 

Consider comparing quotes to get a better idea of your actual rates. Start here by clicking the “Get Quotes” button.