If you own a clothing store in Canada, there’s a need for you to protect your business with adequate insurance coverage.
When people think of high-risk industries, they don’t usually think of the clothing sector. This, on the other hand, would be a major blunder.
Ask any Canadian apparel retailer, and they will tell you that the industry is fraught with dangers. Not only does your clothing material pose the risk of someone sliding and falling in your store, but it also poses the risk of someone developing rashes, itches, hives, or breakouts. This could potentially result in severe allergic reactions, which could lead to death.
Do you think it’s a little far-fetched? Although it is extremely uncommon, the possibility of it happening should be enough to make you want to protect yourself and your organization with comprehensive retail business insurance coverage for clothing store owners.
You’ve worked so hard to build your boutique company, and it would be irresponsible of you to let something go wrong and jeopardize the financial stability of your family, employees, and their families.
In the clothing sector, mortality and skin sensitivities are unlikely, but slips and falls are not. There are also other dangers, which will be discussed later in this article.
Below are some of the most important clothing store insurance policies you will need to operate your business successfully in Canada.
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Business Owner’s Policy and General Liability Insurance
Returning to the previous examples, you must keep in mind that your customers are not the only ones who represent a threat. Customers are also included. Vendors, other retailers, partners, employees, and government officials will all come and go during the day.
There is a risk of slipping and falling or property damage every time someone enters or exits your business. You could be sued even if a rock falls on someone’s car in the parking lot. You may not be found guilty by a Canadian court of law, but you will be forced to pay thousands of dollars in court expenses.
Is this something you’d like to pay for yourself? Do you have the extra cash on hand to handle such expenses right now?
You won’t have to deal with a mix of business owner’s insurance and general liability insurance. These policies protect you from exactly those two things.
Customer injuries are covered by the business owner’s policy, while property damage and slip and falls are covered by general liability.
However, it is important to note that this is not the only form of protection that these plans provide. General liability insurance protects against advertising defamation and libel, while company owner’s insurance covers business interruptions and lost or destroyed items.
Given that nearly $13 million worth of merchandise is stolen from Canadian merchants every year, it only makes sense to ensure that your merchandise is protected. This equates to approximately $35 million each day in sales from local Canadian shops.
While this number might be derived from a number of different retailers around the country, it doesn’t even begin to account for all the possibilities for damaged goods. During transportation or ordinary activity, businesses are likely to suffer just as much property damage.
What about disruptions in business? While you may be protected from fire damage, have you considered the money you will lose while your business is closed? How long are you going to be closed? Even the tiniest hiccup could have a negative influence on some of the most successful clothes stores.
When you combine business owner’s insurance with general liability insurance, you won’t have to worry about any of this. Unfortunately, these aren’t the only situations in which you’ll require security. If you collect data from your customers, you may also want to get a cybersecurity insurance policy.
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Workers’ Compensation Insurance
If you have employees in your clothing store in Canada, workers’ compensation insurance will be required of you. There are no two ways about it. If you want to lawfully start a fashion store, you will need to get this form of insurance for every employee.
Even if it weren’t necessary, it wouldn’t make sense to start a company without this form of insurance. Why? Because you’re not just vulnerable to clients and strangers, but you’re also vulnerable to your own employees. While employees are essential, they do come with their own set of hazards.
Excess Liability/Umbrella Insurance
It doesn’t take a lawyer or a retail expert to recognize how the aforementioned policies apply to any Canadian apparel store. However, nothing is ever as good as it appears, and these policies are no exception.
What does this imply and how does it work? It simply implies that no matter which insurance company you choose, the amount of protection the insurance provider can provide will be limited. Hence the need for an extra layer of coverage for your clothing store called extra liability or umbrella liability insurance.
Even if you go with the best insurance company in Canada for any clothing store, you will probably only be able to get a $1 to $10 million maximum coverage plan. This may seem like a lot of money, and it is, but consider what happens if you have two claims in the same year or at the same time.
Given the risks, the numbers, and the types of fraudsters out there, it’s not out of the realm of possibility. You or your company will be expected to provide whatever additional resources are required. Even the most profitable enterprises would struggle to cover $500,000 in an emergency. Even today, it would be difficult for most businesses to unexpectedly exceed $100,000.