Company insurance is intended to safeguard the financial assets of a business owner and is a vital investment for a cigar store.
This article will discuss the primary insurance coverage for cigar stores, general liability insurance, as well as additional products that are appropriate for this industry.
Cigar 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 Cigar Shop’s General Liability Insurance May Cover
Example 1: A client enters into your cigar shop’s bathroom and slips and falls on the tile floor, breaking his arm. He wants your company to pay for his medical treatment to treat his injuries. When a client is hurt at your company, your general liability insurance coverage will most likely assist you in covering the expense of medical care.
Example 2: One of your cigar store workers is carrying a stack of boxes and cannot see behind the stack without bending his head around it. He rushes around a corner and collides with a client. The contact knocks the client down, causing him to strike his head on the floor and suffer a concussion. The consumer launches a lawsuit against your company, seeking monetary damages. Your general liability insurance coverage will cover the expense of defending your company, including the cost of an attorney and any settlement you may be required to pay.
Example 3: A customer at your cigar store is strolling across the parking lot when she falls on ice and suffers significant injuries. Your general liability insurance will almost certainly cover the cost of treating her injuries. It will also cover any legal fees incurred if the visitor chooses to pursue legal action.
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
For $1 million in general liability coverage, the typical cigar business in America costs between $400 and $1,500 each year.
The cost of your coverage will be determined by a number of variables. Among them are your:
Location
Deductible
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 Cigar 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 cigar stores should have are as follows:
Insurance for Product Liability
As a product seller, there is always the possibility that one of your consumers would file a lawsuit against your company, alleging that one of your items injured him or her. For example, if a lighter explodes in a customer’s face, he may assume that your company is to blame for his injuries. If you need to defend your company in court, a product liability insurance coverage will cover your legal bills. It will also cover any awards or settlements if the lawsuit is settled out of court.
Insurance for Commercial Property
Your cigar and smoking materials inventory might be destroyed in the case of a fire or other catastrophic incident. Replacing your inventory on your own might be expensive, and depending on its worth, it may not even be feasible. The expenses of replacing your goods will be covered by your business property insurance coverage. That means you can buy fresh stock and resume selling cigars, bringing in much-needed revenue.
Coverage Options for Some Cigar Shops
In addition to the insurance listed above, your cigar store may need other forms of coverage based on particular elements of your activities. 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
When a firm has employees, the majority of states require it to have workers’ compensation insurance. Workers’ compensation insurance is a beneficial investment for your company for a multitude of reasons. If one of your employees is harmed while doing a job-related duty, workers’ compensation insurance will pay for medical care. The coverage will also assist to compensate the employee’s missed pay while he or she heals.
Umbrella Insurance for Businesses
There is always the potential that your general liability insurance limits may be surpassed. This might occur if your firm loses a major litigation and is forced to pay substantial damages. Unless you obtain business umbrella insurance, you will be required to pay the remaining amount if your general liability insurance policy limitations are surpassed. An umbrella coverage will continue where general liability insurance ends.
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.