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Company insurance is intended to safeguard the financial assets of a business owner and is a vital investment for a bike store.

Company insurance is intended to safeguard the financial assets of a business owner and is a vital investment for a bike store.

This article will discuss the primary insurance coverage for bike shops, general liability insurance, as well as additional products that are appropriate for this industry.

Bike Shop General Liability Insurance

Every firm, regardless of sector, has risks that should be insured. General liability insurance is the most frequent and comprehensive form of coverage that company owners purchase.

General liability insurance covers the following risks:

Physical harm

Damage to property

Medical expenses

Legal defence and decision

Personal and commercial harm

While general liability insurance is not legally needed for companies, operating without it is exceedingly dangerous. If your company is sued, you might face costs in the hundreds of thousands of dollars (or more). The only way to avoid this sort of catastrophe from destroying your organisation is to have an adequate general liability insurance coverage in place to assist pay for these losses.

Situations That A Bike Shop’s General Liability Insurance May Cover

Example 1: During a test ride, a client sustains significant injuries and chooses to sue. While a court may decide in your favour since the buyer accepted some risks by riding the bike, general liability insurance would cover your legal bills as well as any settlement amounts.

Example 2: While demonstrating the high rate of acceleration of a bike, an employee loses control and collides with a customer’s automobile. The customer’s car repair expenses would be covered by general liability insurance.

Example 3: A rival chooses to sue because they believe your marketing effort defames their business. Your general liability insurance would cover your legal bills as well as any settlement damages.

Of course, this is not an entire list of risks covered by a general liability insurance policy, and certain situations may result in a specific peril not being covered. To minimise coverage gaps, it’s always better to speak with your agent about the terms of your policy.

General Liability Insurance Cost

The typical American bike business pays between $500 and $1,500 per year for $1 million in general liability insurance.

The cost of your coverage will be determined by a number of variables. Among them are your:



Employees’ number

Per-occurrence restriction

The overall aggregate limit

You may be able to get general liability insurance at a lower cost if you buy it as part of a business owner’s policy (BOP) rather than as a separate policy. A business interruption policy (BOP) is a more complete option that covers numerous types of coverage, such as business interruption and property insurance.

Other Types of Coverage Required by Bike Shops

While general liability insurance is the most crucial, there are various different types of coverage to be aware of. Other forms of insurance that all bike stores should have are as follows:

Insurance for Commercial Property

You’ve made significant investments in your bicycle and riding accessory inventory. In the case of a fire or other natural catastrophe, you are liable for any business-related items stored in the building you own. Commercial property insurance would cover the expense of replacing lost merchandise in the event of an accident, allowing you to recover fast.

Insurance for Product Liability

While your consumers accept some risk while riding your bikes, there is always the possibility that someone may bring a lawsuit if they claim one of your items damaged them. In the case of a lawsuit, product liability insurance will safeguard your company by paying your legal bills and any damages awarded.

Types of Insurance That Some Bike Shops May Require

In addition to the insurance listed above, your bike shop may need other forms of coverage based on particular elements of your business. Some of them may not apply to you, so be sure to ask your agent whether policies are appropriate for your company.

Insurance for Workers’ Compensation

Workers’ compensation insurance is required in most states for both part-time and full-time employees. This coverage covers your workers if they are hurt at work or get sick as a result of a workplace accident. It covers not just an employee’s medical expenditures and missed pay if they require time to recuperate, but also any disability benefits resulting from a workplace injury.

Umbrella Insurance for Businesses

While most claims are covered by your general liability insurance policy, certain incidents or lawsuits may be so severe that they threaten to deplete the limits of your main coverage. Commercial umbrella insurance protects you from having to pay for legal expenses and awarded damages that exceed the limits of your main policy out of pocket.

Additional Security Measures for Your Company

Although investing in company insurance is simple (and necessary), it should not be your first line of defence. Yes, insurance will reimburse your company for cash losses incurred as a result of an occurrence, but it is much preferable to avoid losses altogether.

With this in mind, here are a few steps you can take to better secure your company:

Make use of legally binding contracts and other business agreements. (We provide free templates for several of the most often used legal forms.)

To safeguard your personal assets, form a limited liability company (LLC) or a corporation. (To discover how to incorporate an LLC or company in your state, see our step-by-step tutorials.)

Keep your company licences up to date.

Streamline the internal procedures of your company. This will eliminate unneeded variables from routine activities and establish a secure, consistent environment in which to do business.

If your company is an LLC, you should check into LLC insurance.