We’ve all been there, you just got out of the hair salon, you’re wearing your favorite jewelry, and you feel like a million bucks. If we didn’t have businesses like these, it would be difficult for us to be our best selves, and this is also the case for fashion and clothing stores, but have you ever thought about the risk of running one of these businesses? For example, what if one of the t-shirts or shoes you’re selling causes rashes and leaves the customer in discomfort? Heck, it's not even impossible for you to source a defective item from the local tailors and get in trouble for it.
Your clothing store could go under if it doesn’t have the right insurance coverage, and that’s what we’re here to discuss today. In this guide, we’re going to look at the things you need to know about insurance for clothing businesses and fashion shops. We’ll cover the various types of insurance that are available to clothing stores and then we’ll discuss how much you can expect to pay for your coverage.
If you’re looking for an insurance policy for your clothing business, then odds are that you’ll want a general liability policy. General liability insurance is beneficial for clothing stores because it defends you from situations in which you would be held liable for the following situations:
However, injuries aren’t the only thing covered by clothing business liability insurance. This type of clothes shop insurance will also protect you from people who want to come after you for expenses for property damage that may have resulted from:
If you’re searching for a more versatile clothing boutique insurance policy, then you’ll probably be a fan of clothing business insurance, also known as a BOP (Business Owner’s Policy). This isn’t actually a single insurance policy but rather a couple of policies bundled together for a better price.
A business insurance policy essentially combines liability insurance with commercial property insurance. If you’re using a building as a place of work, you have to expect to pay more for your insurance because the minute you have people coming in more frequently, that increases the risk that the insurance carrier is taking.
The commercial property insurance policy will apply to the structures of your building, covering everything that sustains damage from windows, to glass panes, paintwork, roofing, ceiling, and so on. Most commercial property insurance policies will also apply to any tools or equipment that you have in the store, though they may be subject to more stringent limits.
As we’ve already mentioned, BOPs also come included with liability insurance. The exact kind of liability insurance depends on the BOP that you have. Some of them will come included with a public liability policy but the vast majority of them will come with a general liability insurance policy because of the money you save with this kind of bundled insurance.
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How much you end up paying for your fashion shop insurance depends on a variety of things that may not necessarily be under your control. For example, if you have a history of making mistakes and filing claims, insurance companies will jump up your fashion shop insurance premiums.
Aside from that, fashion shop insurance will also be more or less expensive depending on the size of the clothing store that you’re trying to get insurance for. Larger businesses tend to have higher insurance rates whereas smaller ones typically are a lot more affordable to insure.
The cost of insurance is so dependent on the size of your business because your business’s size is directly linked to the amount of risk that an insurance company is taking on when they work with you. Larger companies tend to see more people come through their doors over the course of a year, meaning that there’s a higher chance of someone getting injured or suffering property damage.
Because of the wide variety of prices and insurance premiums that people can expect to pay based on their clothing business, we used a relatively average clothing store to get the following estimates. These prices are for a medium-sized business that has no history of insurance claims.
| Company | Cost per month | Cost per year | Best for |
|---|---|---|---|
| The Hartford | $44 | $528 | BOP insurance |
| AXA | $43 | $516 | Property coverage |
| State Farm | $48 | $576 | Coverage including business signage |
| Average Cost | $103 | $1,236 |
While these numbers may vary based on some of the factors that we mentioned earlier, the average price that a clothing shop owner can expect to pay for insurance coverage is $103 per month and $1,236 annually for a $1 million general liability coverage.
If you’re trying to get insured as a smaller fashion business or clothing store, then you’ll likely end up paying a little bit less than the rates that we mentioned above. Most smaller businesses can expect to pay about $37 a month for their insurance coverage, coming out to a total of about $444 per year for a $1 million general liability coverage.
If you don’t run a shop where you regularly have customers coming in (perhaps you’re doing business online), you can expect to pay quite a bit less for your insurance.
Figuring out which clothing store insurance carrier will work best for you will help ensure that you get the best rates possible in return for quality service. For example, a better company will ensure that your claims are responded to more swiftly and that you will get better customer service.
Unfortunately, knowing which company will serve you best is often a challenge, especially if you don’t have the patience to deal with getting a dozen different quotes. Since we want to make the insurance buying process as simple as possible for you, we’ve gathered three of the top insurance companies. Read to know their pros, cons, and pricing for a $1 million general liability coverage.
One of the oldest insurance companies in America, The Hartford was founded all the way back in 1810. It began in Hartford, CT, as you would expect from the company’s name. While Chubb was recently slated to take over The Hartford, the deal ended up falling through after negotiations grinded to a halt.
The Hartford covers clothing stores under its Boutique Insurance policy. This insurance type includes a few different forms of coverage, but their most popular option is their BOP. This policy combines the usual general liability and commercial property coverages, but it also includes business income insurance.
Average cost : $44
Best for : BOP insurance
Our rating : 5/5
AXA is a multinational insurance company that is technically based in France but they have smaller bases all around the world, allowing them to provide insurance to countless customers in regions like America, the Middle East, Europe, and Africa.
AXA offers a specific insurance policy for clothing shops, and their coverage includes public liability insurance. They even offer commercial property insurance with glass replacement within 24 hours and opt-in accidental damage cover.
Average cost : $43
Best for : Property coverage
Our rating : 4/5
State Farm is the single largest provider of auto as well as property and casualty insurance in the USA. One of the things that sets them apart from many other insurance providers is that they use captive agents, meaning that their agents can only sell their products.
State Farm doesn’t have specific policies for clothing stores but their agents tailor policies to fit your exact needs. They offer a huge range of coverage options, including property, liability, loss of income, business interruption, and a lot more. While getting a quote, you’ll be able to add in whatever your clothing business needs most.
Average cost : $48
Best for : Coverage including business signage
Our rating : 5/5
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1 / 5
Use anyone except Employers. Period. They are non-transparent and shameful. After I complained long enough to warrant a call from a supervisor, the supervisor called back from a PRIVATE NUMBER (no caller ID), left a message that they are not reversing their decision (without any communication with me), and failed to leave a phone number for me to call back. She was hiding! They also fact find via email and phone calls, which is terrific for speed and communication. However, after setting a precedence of email or phone calls, they send time sensitive information via email, without any heads up... they are hoping you miss it and forfeit via expiration. Evil policies. Go elsewhere.
1 / 5
This place is an absolute joke of a company and should be ashamed of the way they conduct business. I was hurt on the job at the end of July and it took them just shy of 7 weeks to issue out a paycheck to me. Yes the amount was back dated but still. Not many have the luxury of not receiving a paycheck for almost 2 months. To top it all off, the original adjuster marked me down for the wrong state which caused a problem from the get go, I've had 3 different adjusters now since each one can't seem to figure out the simplicity of my claim. All my paperwork which includes, my job, house, and drs visits all are from the same state and city but yet some how I have been filed under a completely different state 1500 miles away. They do not answer your phone calls or emails no matter how many you leave. I've had to escalate my frustrations to the supervisors of each of these individuals in order to even get some kind of response. I've had more communication and information given to me about my claim from the customer service representatives then the actual adjusters.......... please tell me how that works?! A serious overhaul needs to happen here in order to serve your clients the way they deserve to be taken care of. 10/10 do not recommend this company to a single soul on earth
1 / 5
I have never had the displeasure of working with a more incompetent and disrespectful person in my life. I’m an injured worker and the adjuster that was assigned to my case was named Carrie Furgeson. In the past 6 weeks that I’ve been injured and out of work I have only been able to get ahold of her twice, not for lack of trying. I have left countless voicemails, countless emails, and she ignores them all. When I am finally able to get ahold of her I’m greeted with terrible customer service. She is rude, she talks over me and I’m hardly able to get a word in edgewise. She spelled my name wrong on my documents even after I spelled it for her properly countless times, this caused a whole new issue with my bank. I have bill collectors from the hospital calling me demanding payment and Carrie Furgeson won’t do a single thing to help, or to get them paid. All of my documentation is in Colorado, my job is in Colorado, my address is in Colorado, all my Dr offices and appointments have been in Colorado and Carrie still managed to hold my claim because she wasn’t sure what state she needed to file it under. It’s been 6 weeks since my Injury and my company still hasn’t received the wage paperwork to fill out so they can get me my correct wages. When she’s not ignoring me she’s answering my questions with “I don’t know” well I don’t know how she got this job, because apparently she doesn’t know anything about it. She is a disgusting morose individual inside and out and I genuinely wish her the worst in all of her future endeavors. I highly recommend you don’t use this company. Please if you are a business owner and your looking into this company please don’t use them. I’m sure they have the cheapest payment and that’s why companies use them in the first place, but you will be doing your employees a grave disservice by forcing them to venture into this absolute dumpster fire of a company. I would rate 0/5 if possible but 1 was the lowest I was allowed.
5 / 5
Their general liability insurance purchase process is simply the best online experience I've ever had in my life!
5 / 5
As long as they cover your line of business, you're literally covered! best rates, best coverage, best online experience, best professionals, can't be happier that I chose them!
Not all those who wander are lost.
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