Hardware Store Insurance: Cost & Quotes From $11/mo

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Hardware stores make the construction industry move by making equipment and supplies easily available. These businesses see to it that contractors have everything they need to complete a project.

Like other businesses, hardware stores face various risks. An employee can sustain repetitive strain injuries due to the continuous lifting of heavy objects. The forklifts and other equipment used for stockpiling supplies can get damaged. It’s not even impossible for a hardware store’s warehouse to get burned or destroyed because of an accident or a natural disaster.

Your hardware store is a retail business and it can be insured through a retail insurance package. Nonetheless, hardware store insurance provides the best protection. This consists of general liability, commercial property, and other business insurance policies underwritten to cover the exposures unique to you.

Common Hazards and Risks in Hardware Stores

Hazards and risks are present in any business. For hardware stores, these are the most common ones:

• Claims for bodily injuries and property damage

• Accusations of selling items with errors in design, incorrect labeling, or defects

• Business property fire and other devastating occurrences

• Theft of hardware supplies that employees or third parties commit

• Forklift accidents

Hardware Store Liability Insurance

General liability insurance and product liability insurance are the most common types of hardware store liability insurance. The sections below discuss how each functions.

Hardware Store General Liability Insurance

General liability insurance is the core policy of almost all hardware shop insurance packages, safeguarding you from third-party claims for bodily injuries, property damage, copyright infringement, slander, or libel. By having this insurance, you can cover these costs without any problems:

• Emergency care and medical treatment of the claimant

• Reimbursement for the damaged property of the claimant

• Legal defense

• Court judgments

Use the table above to see which insurance company offers the best general liability insurance for hardware stores.

In What Situations Can Your Hardware Store Use General Liability Insurance?

Your hardware store can use general liability insurance to cover the cost of claims filed after any of these situations happen:

• A customer slipped and fell on the wet floor while walking around your hardware store

• An employee is placing supplies on display racks, and a box falls on a customer passing by

• A customer sustains an injury while testing a drill, cutter, or any other power tools sold at your hardware store

• Your hardware store uploaded marketing material on social media and got sued by another company for copyright infringement

• An employee is hauling construction supplies for a customer by foot. Out of his haste, another customer was shoved into a corner by accident and got injured

How Much General Liability Coverage is Available for Your Hardware Store?

Your hardware store can opt to get a general liability policy with a $300,000-$500,000 per occurrence limit and a $1 million-$2 million aggregate limit. Nonetheless, what’s recommended is a general liability policy with a $1 million-$2 million per occurrence and aggregate limit.

Can General Liability Insurance Help if My Landlord Files a Claim for Property Damage?

Yes. General liability insurance comes with an optional coverage that exclusively covers property damage claims filed by landlords. This is called the rented premises liability coverage inclusion. Rented premises liability coverage grants a $100,000-$200,000 coverage you can use to reimburse the landlord if his property is damaged by a fire due to your negligence.

Hardware Store Product Liability Insurance

Your hardware store primarily generates revenues by distributing goods to customers. And so, aside from accidents, it can also be held liable for the injuries or property damage that’s caused by sold equipment, materials, and other products.

A product liability policy is the insurance that will cover costs if a customer files a claim because your hardware store sold a product with:

• Design issues

• Manufacturing issues

• Labeling errors

• Inadequate instructions/safety warnings

• Factory defects

A Customer is Accusing My Hardware Store of Selling Knockoffs. Can Product Liability Insurance Help?

The selling of knockoffs counts as fraud. Fraud is usually excluded in the product liability insurance for hardware stores. And so, the answer is no.

The Customer is Filing a Claim for Missed Refunds. Does Product Liability Insurance Cover This?

Product liability insurance doesn’t cover missed refunds. It’s because this insurance only covers liabilities for damages that sold products inflict on customers.

Commercial Property Insurance for Hardware Stores

A hardware store isn’t a business that you can start without a huge investment. And speaking of investment, the majority of your financial resources will go to the building and the inventory.

Purchase commercial property insurance and ensure that you can continue operating even if something happens to your hardware store’s building and inventory.

Use the table above to see which insurance company offers the best commercial property insurance for hardware stores.

How Does Commercial Property Insurance Ensure Your Hardware Store’s Survival?

Commercial property insurance ascertains the survival of your hardware store by reimbursing the estimated value of the building and inventory that got damaged, destroyed, or lost due to the following:

• Fire

• Theft

• Vandalism

• Civil commotion

• Sinkhole collapse

• Volcanic action

• Lightning

• Weather

• Falling objects

• Impact

• Vehicle

• Aircraft

• Sprinkler leakage

Can I Add Business Equipment as Insured Items in the Terms of Commercial Property Insurance?

Yes. Carriers allow you to schedule expensive business equipment, such as forklifts, point-of-sale systems, trolleys, and power generators, in the terms of commercial property insurance. By doing so, you can recover the value of these items in case they get damaged or destroyed while within your hardware store’s area due to fire, theft, vandalism, and other covered perils.

A Construction Company Bought Several Construction Supplies. However, These Got Damaged Before Being Shipped. Can I Get a Reimbursement From Commercial Property Insurance?

Paid supplies are already the construction company’s property that’s under your custody. The thing is, commercial property insurance comes with a care, custody, and control exclusion. And so, the answer is most likely a no.

I Lost a Batch of Incoming Hardware Supplies. Will Commercial Property Insurance Grant Coverage if the Shipping Carrier Refuses to Take Responsibility?

No. Commercial property insurance doesn’t cover inventory that’s not within the premises of your hardware store. But still, note that the shipping company has cargo insurance and they can certainly reimburse some of your financial losses.

Business Owner's Policy (BOP) for Hardware Stores

A business owner's policy (BOP) is designed to offer comprehensive coverage for small local hardware shops, including those with multiple locations. A BOP is a type of small business insurance that combines various policies into one package. Insurers normally underwrite this type of business insurance to SMBs that operate in lower-risk industries, such as retail, wherein your business exists.

How Does a Business Owner’s Policy Work?

Think of a BOP as an all-in-one protection against common business risks. This policy protects against lawsuits and commercial property damage. The coverages included in a BOP vary from one provider to another, but most BOPs include the following policies:

• Property damage coverage–A business owner’s policy can be used like a commercial property policy. This will reimburse financial losses and help you get back on track in case a covered peril happens

• Liability coverage–You'll typically find general liability coverage included in a BOP to ensure you're protected from third-party bodily injury, property damage, as well as personal and advertising injury

• Business interruption coverage–A major catastrophe may occur and force you to close your hardware store for an extended time. This insurance policy may reimburse your lost income and other extra expenses, such as employee wages

Tools and Equipment Insurance for Hardware Stores

Tools and equipment insurance can cover your hardware store’s precious equipment, not only from damage or destruction but also breakdown. Purchase this and you can insure the estimated overall value of forklifts, trolleys, ladders, power generators, and other precious items. Some insurance companies also grant coverage up to the limits provided. Use the table above to see which insurance company offers the best tools and equipment insurance for hardware stores.

Workers' Compensation Insurance for Hardware Stores

Accidents are bound to happen, and the chances of an employee suffering an injury are pretty high. For example, an employee can fall from a height while putting stocks on the racks. He or she might also stumble while helping a customer take materials to the car.

Workers' compensation insurance covers work-related injuries and illnesses. It provides the funds to pay for the following:

• Medical costs (including surgery, prescription drugs, and rehabilitative care)

• Lost wages because of time lost out of work

• Medication

• Hospitalization

• Rehabilitation and retraining

• Death benefits and allowance to dependents, in case of death

Can Workers Compensation Insurance Help if an Employee Sues Your Hardware Store?

Some insurance companies allow you to add an employer’s liability coverage to workers' compensation insurance. By adding this, workers' compensation insurance can cover claims for negligence or failure to grant workers comp benefits after an employee sustained a work-related injury or disease.

Cyber Liability Insurance for Hardware Stores

Insurance companies will offer a cyber liability policy if your hardware business doesn’t only sell from a brick-and-mortar store but also through its own online shop.

Your online shop can get breached. As a result, the credit card numbers, emails, passwords, and cellphone numbers of clients can get exposed. This might result in fraudulent transactions, spam calls, phishing emails, etc.

Cyber liability insurance will cover legal defense costs if affected third parties hold you liable. Moreover, this insurance can also take care of the expenses for:

• Public relations

• Credit and fraud monitoring

• Cyber extortion

• Recovery of loss data

• Professional services for containing the breach

Other Business Insurance Policies for Hardware Stores

Here are additional policies you can include in your hardware store insurance package, depending on the activities of your business:

• Commercial auto insurance-Most states require hardware store operators who own or lease vehicles for business purposes to carry commercial auto liability insurance. Should the business vehicle be involved in a crash, this insurance covers the medical costs, property damages, and liability claims

• Pollution liability insurance-Most small hardware stores don't stock fertilizers or chemicals that pose environmental concerns, but if you manage a wholesale hardware store that supplies environmentally hazardous products, you may want to invest in pollution liability insurance

• Employment practices liability insurance-This insurance policy protects your hardware shop from employment-related claims, covering litigation costs in case an employee sues your business for illicit business practices, such as wrongful termination, discrimination, or sexual harassment

• Employee dishonesty insurance-Employee dishonesty insurance will recover the financial losses after you’ve discovered a dishonest act of an employee. Dishonest acts covered under the terms of this insurance are theft, social engineering, embezzlement, forgery, misrepresentation, etc.

• Inland marine insurance-Inland marine insurance will reimburse your losses if portable business property gets damaged or lost during the trip due to negligence, theft, fire, upset, vehicular accident, etc.

Hardware Store Insurance Cost

The average hardware store insurance cost is $46 per month or $552 per year for a $1 million general liability policy. Actual rates of customers vary based on different factors such as:

• Business size

• Number of employees

• Business location

• Claims history

• Deductible level

• Policy limits

You can save money on business insurance by buying a BOP. Insurance carriers often sell the policy at a cheaper cost than purchasing each insurance policy separately. In connection, here’s another table showing the rates of the best companies for a $1 million general liability insurance: