Upholstery Insurance: Liability, Cost & Quotes From $11

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Setting up an upholstery shop can be a daunting task, considering that the average startup cost is $17,167. But, this business has its perks, including diverse customers like homeowners, restaurants, offices, and players in the automotive industry.

And as a reward for their work, upholstery shop owners earn reasonable returns, ranging from $531 to $820. Unfortunately, issues like third-party injury lawsuits, equipment damage, theft/ vandalism, and third-party property damage cases often eat away at their profits.

But here's some good news: if you are in this industry, you can use tailored insurance for upholsteries to cover your business against losses related to such complications.Let's discuss what is upholstery business insurance and everything it entails.

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Upholstery Liability Insurance

Insurance companies underwrite many types of liability insurance. But liability insurance carriers offer to upholstery businesses are general liability insurance, professional liability insurance, and product liability insurance. 

General Liability Insurance for Upholsteries 

Just like carpenters, drywall installers, or HVAC contractors, upholsterers use materials and tools to do their job. These include staplers, mallets, and hot glue guns. A client with a kid visits your shop and the young one gets his hands on a stapler gun and injures himself. A vendor might also experience property damage or personal injuries while delivering stocks. General liability insurance for upholsteries covers you against such scenarios. This policy protects your business from the following:

Coverage	Function
Third-Party Personal Injuries	General liability insurance will take care of medical expenses if your upholstery’s operations inflicted injuries to vendors, customers, and other third parties
Third-Party Property Damage	Third parties might interact with sharp or heavy objects in your upholstery and incur property damage. If your business is demanded to reimburse the value of the damaged property, general liability insurance will kick in and pay on your behalf
Legal Expenses	It’s common for third parties to sue your business after it inflicted property damage or personal injuries. The terms of general liability insurance specifically state that the policy will pay for lawyer fees, payment orders, and other legal costs on your behalf

Insurance companies will recommend you get additional protection from general liability insurance. Though they come at a price, these add-ons make your business resilient against  other common business exposures:

Coverage	Function
Advertising Injury Coverage	Consider situations where you unintentionally damage a client’s or another business’s reputation verbally or in writing. Also, another business might accuse your upholstery of copying its trademark, logo, slogan, or advertisement. Advertising injury coverage in general liability insurance will help in such situations. Specifically, these will cover legal  expenses when a third party sues your upholstery for slander, libel, and other types of reputational or advertising harm
Products and Completed Operations Coverage	Upon completely refurbishing a client’s furniture, there might be defects that aren’t noticeable until much later.  This incident is very problematic as the client may come back and file a claim against your business. Products and completed operations coverage will be absolutely useful. If you add this to the terms of general liability insurance, the policy will take care of claims past clients file
Rented Premises Liability Coverage	Not all have the money for the construction of a commercial building. And if you’re just renting a space for your upholstery business, rented premises liability coverage will be helpful. Add this to general liability insurance and it will take care of expenses if your landlord demands reimbursements because fire damaged the commercial space you’re renting

Remember, although you may do all you can to prevent accidents, including keeping dangerous tools out of reach, you can't anticipate everything. A customer may walk into your workshop, slip, fall, and suffer injuries. Not everyone is understanding and forgiving; some may decide to sue you. Without general liability insurance for upholstery businesses, you have to cover the costs out of pocket, and this will cripple your finances.

Professional Liability Insurance for Upholsteries

You or an employee sometimes commit careless mistakes while refurbishing a client’s furniture. If such a mistake damages the piece, the owner will file a claim against your business to recover financial or economic losses. You have to pay the client and to avoid losing money, get professional liability insurance. 

Professional liability insurance is a type of liability insurance policy that covers expenses if a client experienced economic or financial loss because of your business operations. Specifically, this provides coverage if a claim is filed for:

• Negligence

• Violation of confidentiality

• Violation of good faith

• Violation of fair dealing

• Missed deadlines

• Other acts considered errors and omissions 

Product Liability Insurance for Upholsteries

You will find product liability insurance if your upholstery sells materials or items to customers. This kind of liability insurance provides coverage if your business causes injuries or property damage to clients with a defective product. For example, if the leather you installed causes damage to the sofa or triggers rashes on anyone who sits on it, product liability insurance will cover associated expenses if the client files a claim 

Upholstery Commercial Property Insurance

Did you know that around 38% of businesses don't reopen after a major disaster? Unfortunately, your upholstery shop isn't disaster-proof. A fire, tornado, storm, or explosion can strike any minute and dismember all your carefully laid plans and efforts.

If you have commercial property insurance, spending all day fretting over possible disasters becomes unnecessary.  This business insurance provides protection against the following perils:

Building Destruction	Building Damage
An explosion, fire, or extreme weather will destroy your upholstery’s commercial building. In such an event, commercial property insurance will reimburse your losses up to the building’s replacement cost or actual cash value	Fire, thieves, burglars, extreme weather, and other covered perils will damage the structures of your upholstery’s building. Commercial property insurance will provide a reimbursement equal to the actual cash value or replacement cost of such damaged structures

Commercial property insurance comes with inclusions - stocks and contents coverage, and equipment and tools coverage. The table below briefly explains how these help:

Stocks and Contents Coverage	Business Equipment and Tools Coverage
Stocks and contents coverage is the inclusion in commercial property insurance that will reimburse your losses if fire, theft, vandalism, and other covered perils destroyed office furniture, important documents, upholstery materials, and other valuable items	Business equipment and tools coverage is the inclusion in commercial property insurance that will cover losses if pliers, electric rotary cutters, gloves, eye-protective equipment, and other tools or equipment become damaged or lost due to fire, theft, vandalism, and other covered perils

Upholstery Business Owner’s Policy

Always go opt for a business owner’s policy if you’re planning to insure your upholstery with general liability insurance and commercial property insurance. A business owner’s policy is a combination of general liability insurance and commercial property insurance. Its cost is cheaper than getting commercial property insurance and general liability insurance as stand-alone policies. 

Also, depending on where you get it, a business owner’s policy will include additional insurance options such as workers compensation insurance, business interruption insurance, professional liability insurance, equipment breakdown insurance, and more. 

Upholstery Workers' Compensation Insurance

Does your upholstery have one or more employees? If it does, they should be covered by workers' compensation insurance. Most state laws require employers to purchase this policy even if they work with a single employee.

That is important because people working in your upholstery may get injured. The cost of treating them and paying for their losses as they recuperate can cause irreparable financial harm.

Besides compliance, workers' comp is useful because it shoulders the expenses for the following on your behalf:

Coverage	Function
Employee Treatment/Medical Procedure	An employee might fall from a shelf,  incur wounds from a tool, experience repetitive motion injuries, etc. Workers' compensation insurance will provide money for the employee’s medical treatment/procedure
Hospitalization	When a fire breaks out, an employee might get severely injured and need intensive hospitalization. Workers' compensation insurance is useful in such a situation. Specifically, it will cover hospital bills so that your employee can quickly heal
Medication	Workers' compensation insurance also covers expenses if the attending physician requests your employee to buy specific medicines to prevent an injury from becoming severe after surgery or therapy
Rehabilitation	Your employee will need rehabilitation if his or her injuries impair specific bodily functions. This needs money too.  In line with this, you can use workers' compensation insurance to pay the rehabilitation center
Lost Income Compensation	If your employee experiences a severe injury,  he or she might need to take a break from work. This will result in lost income which you need to compensate. But there’s no problem if you have workers' compensation insurance. It will provide a weekly allowance to the employee on your behalf. This weekly compensation for lost income is equal to two-thirds or 67% of the average weekly wage
Death Benefits	Workers' compensation insurance provides help if your employee dies. It will  cover funeral expenses, cash aid to dependents, and other death benefits the law mandates you to provide as the employer

Commercial Auto Insurance for Upholsteries 

Consider getting commercial auto insurance if you’re using a vehicle to get stocks or deliver completed pieces to their owners.  This is also useful if you’re a mobile upholstery service business. Commercial auto insurance provides the following protections:

Coverage	Function
Auto Liability Coverage	Auto liability coverage in commercial auto insurance is useful if you caused a vehicular accident and injured third parties or damaged properties. It will pay for the medical expenses of persons you injured and will reimburse the owners of the damaged properties. But note one thing though, auto liability coverage won’t take care of expenses if your vehicle caused the accident due to the following reasons: the driver is DUI, the driver is operating with no license, the vehicle is running with no headlights, and other illegal activities
Physical Damage Coverage	Nowadays, having a vehicle repaired or maintained in an auto repair shop is very expensive. This is why physical damage coverage is very helpful for your upholstery's auto. This has two forms - collision and comprehensive. Collision physical damage coverage will cover costs if your upholstery’s commercial vehicle incurred damage after colliding with a vehicle or object on the road. On the other hand, comprehensive physical damage coverage will cover expenses if fire, theft, vandalism, and other covered perils damaged your business’s vehicle
MedPay/Personal Injury Protection	MedPay/personal injury protection covers you, the driver, and the passengers when a vehicular accident happens and injuries are sustained. Both cover your treatment, the passenger’s treatment, and the driver’s treatment. Moreover, coverage applies whether or not the accident is your commercial vehicle’s fault. But note that compared to personal injury protection, MedPay also provides lost income compensation and other benefits.

Additional Insurance Options for Upholsterers

Besides third-party injuries, property damages, and legal fees, upholsterers often deal with numerous other problems and expenses. If you want to be safer, get coverage from as many policies as possible, including:

Commercial Umbrella Insurance

Most insurance policies have specific liability limits, i.e., the maximum stipulated sum your provider will pay for claims. For instance, if you purchase a general liability policy with a $50,000 limit, your insurer can't pay anything beyond $50,000 to any injured customer.

Commercial umbrella insurance covers policyholders like upholsterers against costs that exceed other liability coverage limits. This option may help you cover legal fees, medical bills, third-party property damage, and judgments and settlements.

Simply put, this type of insurance protects the upholstery shop you run from enormous, unexpected events that can annihilate its financial stability and reputation.

Crime Insurance

Business crimes are more common and detrimental than people think. For instance, according to a recent article, employee theft alone causes 25% of business bankruptcies! 

Considering that upholsterers use expensive tools like rotary and demolition hammers, these findings should be worrying.

Running security checks and installing security systems in your upholstery shop may help you prevent crime, but it's not enough. You need to use business crime insurance coverage to protect the business and essential assets from theft, fraud, embezzlement, etc.

Employer’s Liability Insurance

Employer’s liability insurance will cover attorney fees, payment orders, and other legal costs if an employee experiences a work-related injury and sues you for negligence. Note that employer’s liability insurance is available as a stand-alone policy or as an inclusion in workers' compensation insurance. 

By the way, if you have workers’ compensation insurance,  having employer’s liability insurance might be useless. Depending on which state your business is registered in, employees who experienced a work-related injury are prohibited from taking legal action if your business is covered with workers' compensation insurance. 

Employment Practices Liability Insurance 

Employment practices liability insurance will cover attorney fees, compensatory payments, and other legal costs if an employee sues your business for wrongful termination, sexual abuse, discrimination, and other related causes. 

Business Interruption Insurance

Business interruption insurance seeks to protect your business from the consequences of having business operations temporarily paused. If you need to close to make way for renovation, relocation, or let an economic crisis pass by, business interruption insurance will pay for employee wages, taxes, mortgages, loans,  and other operational costs. It will also reimburse the revenues your business would’ve had. 

Upholstery Insurance Cost

Upholstery shop insurance costs largely depend on your company's risk level. But most pay $33.33 per month or $400 per year for a $1 million general liability insurance for upholsteries. The actual amount you will spend on your upholstery shop's coverage depends on the following:

• Insurance provider

• Shop location

• Number of workers

• Coverage limit

• Selected policies

• Revenue 

In addition, here’s the pricing of the best carriers for tailored insurance for upholstery businesses: