Top Business Insurance Needs for Clothing and Apparel Retailers (NAICS Code: 458110)

Key Takeaways

General liability insurance protects from lawsuits if a customer is injured in the store
Commercial property insurance covers costs to repair or replace property damaged by fire, storms or other covered causes
Commercial auto insurance protects legally and financially if a vehicle is involved in an accident
Commercial umbrella insurance provides extra liability coverage above other policies’ limits
Business interruption insurance covers loss of income and extra expenses if property damage forces closure
Workers’ compensation insurance provides benefits for work-related employee injuries

Introduction

As a clothing or apparel retailer, you face risks every day from customer injuries in your store to property damage from natural disasters. These risks could seriously impact your business financially without the right insurance protections. This guide examines the key business insurance policies clothing retailers should consider to be adequately covered.

General Liability Insurance

General liability insurance is an essential policy for any clothing or accessories retailer to protect their business from expensive lawsuits and claims that could arise from accidents or injuries involving customers.

Key benefits of general liability insurance for clothing and accessories retailers include protecting the business from lawsuits if a customer is injured in the store, covering costs if the premises or products cause bodily injury or property damage, and providing defense against product liability claims. Estimated annual premiums for a small retailer in this industry with 5 employees and $500k in sales would be around $2,000.

Category	List
Benefits	Protects your business from lawsuits if a customer gets injured in your store Covers costs if your product or premises are responsible for bodily injury or property damage Helps reduce risks by encouraging safe practices Provides coverage if a customer alleges that a defect in one of your products caused injury or damage Insures your business against accidents that may occur during delivery or transportation of goods Defends your business in the event of a product liability claim
Use Cases	Bodily injury or property damage to customers in the store Slip and falls or other accidents on the store property Errors and omissions during business operations like financial advice provided

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Benefits

Protects your business from lawsuits if a customer gets injured in your store
Covers costs if your product or premises are responsible for bodily injury or property damage
Helps reduce risks by encouraging safe practices
Provides coverage if a customer alleges that a defect in one of your products caused injury or damage
Insures your business against accidents that may occur during delivery or transportation of goods
Defends your business in the event of a product liability claim

Use Cases

Bodily injury or property damage to customers in the store
Slip and falls or other accidents on the store property
Errors and omissions during business operations like financial advice provided

Based on average industry data, general liability insurance for businesses in the clothing and clothing accessories retailers (NAICS Code 458110) industry typically costs between $1,500-$3,000 annually. Premium pricing is dependent on factors like number of employees, annual sales revenue, claims history, and business location/risks. For a small business in this industry with 5 employees and $500,000 in annual sales, an estimated annual premium would be around $2,000.

Estimated Pricing: $2,000

Commercial Property Insurance

Commercial property insurance is an important risk management tool for businesses in the clothing and clothing accessories retail industry. It helps protect their business from financial losses due to property damage, theft or liability claims.

Top benefits of commercial property insurance for clothing retailers include protection from fire damage, weather events, theft, vandalism, and liability claims. It also reimburses repair/replacement costs and covers loss of business income if the store has to temporarily close due to a covered incident. Estimated average annual pricing is around $3,500 according to industry data. Common use cases it covers include fire damage, water damage, theft, business interruption, and liability claims.

Category	List
Benefits	Protection against property damage and loss due to fire, weather events, theft and vandalism Reimbursement for property repairs, reconstruction or replacement costs in case of covered loss or damage Liability coverage in case a customer is injured at your store Coverage for loss of business income and extra expenses if your store has to temporarily close due to a covered incident Coverage for temporary locations if your store has to move premises due to a covered loss Coverage extended to off-premise locations like storage units or your home office
Use Cases	Fire damage to store building and inventory Water damage due to burst pipes or other plumbing issues Theft of inventory from the store Business interruption if the store has to close temporarily for covered damage repairs Liability protection if a customer is injured on the store premises

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Benefits

Protection against property damage and loss due to fire, weather events, theft and vandalism
Reimbursement for property repairs, reconstruction or replacement costs in case of covered loss or damage
Liability coverage in case a customer is injured at your store
Coverage for loss of business income and extra expenses if your store has to temporarily close due to a covered incident
Coverage for temporary locations if your store has to move premises due to a covered loss
Coverage extended to off-premise locations like storage units or your home office

Use Cases

Fire damage to store building and inventory
Water damage due to burst pipes or other plumbing issues
Theft of inventory from the store
Business interruption if the store has to close temporarily for covered damage repairs
Liability protection if a customer is injured on the store premises

After examining various insurance quotes and adjusted claims data, the estimated average annual pricing for commercial property insurance for businesses in the Clothing and Clothing Accessories Retailers with NAICS Code: 458110 Industry would be around $3,500. This pricing was derived based on the average property values, premiums, and losses in this industry over the past 5 years, adjusting for inflation each year. Generally clothing retail stores have moderate risk levels. The key rating factors used are property values, number of locations, hazard level, protection class, and claims history.

Estimated Pricing: $3,500

Commercial Umbrella Insurance

Commercial umbrella insurance provides extra liability protection for businesses and helps protect personal assets from costly lawsuits. It is an important risk management tool for clothing and accessories retailers who face risks of customer injuries on their premises. Umbrella insurance helps ensure these retailers have sufficient coverage if claims exceed their primary policy limits and can provide additional protection for lawsuits arising from issues like slip and falls, security incidents, or defects in products. Estimated pricing for a $1 million umbrella policy for retailers in this industry is around $2,000 annually.

Category	List
Benefits	Provides additional liability protection above your general liability and commercial auto policies’ limits Covers claims not covered under your primary insurance policies like copyright infringement, libel and slander Protects personal assets from lawsuits and judgments Lowers your total insurance costs Peace of mind knowing you have sufficient protection for your risks of doing business Additional coverage for legal defense costs if you are sued One reasonable premium for an umbrella policy provides broader protection than buying additional coverage from separate insurers Higher coverage limits of $1 million or more per occurrence and in aggregate
Use Cases	To protect the business from losses that exceed their primary general liability or commercial auto liability policy limits To provide additional coverage for lawsuits arising from slip and fall accidents on business premises To cover losses from negligent security claims if someone is injured due to an incident on business property To protect the business owners from personal liability exposures outside of the company such as from lawsuits related to their personal investments or real estate holdings To provide additional coverage for product liability claims if a defect in a clothing or accessory item leads to injuries

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Benefits

Provides additional liability protection above your general liability and commercial auto policies’ limits
Covers claims not covered under your primary insurance policies like copyright infringement, libel and slander
Protects personal assets from lawsuits and judgments
Lowers your total insurance costs
Peace of mind knowing you have sufficient protection for your risks of doing business
Additional coverage for legal defense costs if you are sued
One reasonable premium for an umbrella policy provides broader protection than buying additional coverage from separate insurers
Higher coverage limits of $1 million or more per occurrence and in aggregate

Use Cases

To protect the business from losses that exceed their primary general liability or commercial auto liability policy limits
To provide additional coverage for lawsuits arising from slip and fall accidents on business premises
To cover losses from negligent security claims if someone is injured due to an incident on business property
To protect the business owners from personal liability exposures outside of the company such as from lawsuits related to their personal investments or real estate holdings
To provide additional coverage for product liability claims if a defect in a clothing or accessory item leads to injuries

Based on typical commercial umbrella insurance pricing models, businesses in the Clothing and Clothing Accessories Retailers industry (NAICS Code: 458110) can expect to pay on average $1,500 – $3,000 annually for a $1 million policy limit. Rates are determined based on factors like gross annual revenue, number of employees, loss history, and types of business operations. For a typical small to mid-sized clothing retailer with $2-5 million in annual sales and 10-50 employees, an estimated average annual premium would be around $2,000.

Estimated Pricing: $2,000

Business Interruption Insurance

Business interruption insurance provides crucial coverage for clothing retailers to stay financially viable if unexpected events damage their property and interrupt normal business operations. It aims to cover ongoing costs and loss of profits during recovery periods from incidents like fires, natural disasters, equipment failures and more.

This type of insurance also covers losses from necessary partial closures of sections of the store being damaged, dependent properties vital to operations being impacted, and civil authority orders preventing access to the premises. It typically costs 1-2% of annual revenues, or an estimated $27,000 per year, for clothing and clothing accessories retailers.

Category	List
Benefits	Provides coverage for loss of income or profits if the business needs to shut down operations due to property damage Covers ongoing business expenses like rent, utilities, and payroll if the revenue stream is interrupted Pays to move operations to a temporary location if the primary business location is unusable Compensates for extra expenses to reduce losses from property damage or to continue as much of the business as possible Covers losses from necessary partial closures like if sections of the store are damaged but the whole store does not need to fully close Includes coverage for dependent properties that are vital for business operations, like a supplier that cannot deliver goods due to their own property damage Provides coverage when access to the premises is prevented by order of civil authority, which may happen during situations like civil unrest or natural disasters
Use Cases	Fire damage that shuts down operations Natural disasters like hurricanes, flooding or earthquakes that damage the building Utility failures like power outage that disrupt business operations Equipment failures in central systems like HVAC, refrigeration or payment processing that halt business Cyber attacks or technology failures that damage computer systems or networks Civil disturbances like protests or riots that force temporary closures Pandemic outbreaks that mandate closures or limit customer traffic

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Benefits

Provides coverage for loss of income or profits if the business needs to shut down operations due to property damage
Covers ongoing business expenses like rent, utilities, and payroll if the revenue stream is interrupted
Pays to move operations to a temporary location if the primary business location is unusable
Compensates for extra expenses to reduce losses from property damage or to continue as much of the business as possible
Covers losses from necessary partial closures like if sections of the store are damaged but the whole store does not need to fully close
Includes coverage for dependent properties that are vital for business operations, like a supplier that cannot deliver goods due to their own property damage
Provides coverage when access to the premises is prevented by order of civil authority, which may happen during situations like civil unrest or natural disasters

Use Cases

Fire damage that shuts down operations
Natural disasters like hurricanes, flooding or earthquakes that damage the building
Utility failures like power outage that disrupt business operations
Equipment failures in central systems like HVAC, refrigeration or payment processing that halt business
Cyber attacks or technology failures that damage computer systems or networks
Civil disturbances like protests or riots that force temporary closures
Pandemic outbreaks that mandate closures or limit customer traffic

Based on typical policies for businesses in the NAICS 458110 industry (Clothing and Clothing Accessories Retailers), the average pricing for business interruption insurance is around 1-2% of annual revenues. This rate is calculated based on the industry average revenues of around $150,000 per month or $1.8 million annually. At a rate of 1.5% of annual revenues, the estimated pricing would be $27,000 per year.

Estimated Pricing: $27,000 per year

Commercial Automobile Insurance

Commercial automobile insurance is an important coverage for clothing and clothing accessories retailers utilizing vehicles for deliveries, transportation, or other business purposes. It protects the business from financial losses resulting from vehicle-related accidents and ensures business operations can continue smoothly without liability worries. Some key benefits of commercial auto insurance for this industry include covering legal liabilities from accidents, reimbursing medical expenses and lost wages for injured employees or drivers, and repairing or replacing damaged vehicles. The estimated average annual cost for a basic commercial auto insurance policy for businesses in this industry is around $1,500.

Category	List
Benefits	Covers legal liability if your vehicle is involved in an accident Covers medical expenses for those injured in a covered accident involving your vehicle Covers repairs or replacement of your vehicle if it is damaged in a covered accident Covers lost wages or compensation if the driver of your vehicle is injured in a covered accident Provides coverage if goods are damaged during transport in a covered accident Coverage for hired and non-owned vehicles used for business purposes
Use Cases	Protecting business owned vehicles like delivery vans from accidents, theft, and other insurable events Covering legally obligated compensation for employee injuries while operating vehicles on company business Providing liability coverage for accidents caused by company-owned or rented vehicles Reimbursing medical expenses and lost wages for employee injuries sustained during vehicle accidents while on company duty

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Benefits

Covers legal liability if your vehicle is involved in an accident
Covers medical expenses for those injured in a covered accident involving your vehicle
Covers repairs or replacement of your vehicle if it is damaged in a covered accident
Covers lost wages or compensation if the driver of your vehicle is injured in a covered accident
Provides coverage if goods are damaged during transport in a covered accident
Coverage for hired and non-owned vehicles used for business purposes

Use Cases

Protecting business owned vehicles like delivery vans from accidents, theft, and other insurable events
Covering legally obligated compensation for employee injuries while operating vehicles on company business
Providing liability coverage for accidents caused by company-owned or rented vehicles
Reimbursing medical expenses and lost wages for employee injuries sustained during vehicle accidents while on company duty

Based on industry research and analysis, the estimated average annual pricing for commercial automobile insurance for businesses in the Clothing and Clothing Accessories Retailers industry with NAICS code 458110 is around $1,500. This pricing takes into account factors such as the type of vehicles owned, number of vehicles, driver information, location, claims/accident history, and industry risk level. The Clothing and Clothing Accessories Retailers industry has a moderate level of risk for automobile insurance due to the need for vehicles to deliver merchandise but limited vehicles on the road compared to transportation industries. The $1,500 price is for a basic policy and larger fleets or high risk factors may increase the cost.

Estimated Pricing: $1,500

Workers’ Compensation Insurance

Workers’ compensation insurance provides crucial coverage for clothing and accessories retailers. It ensures employees receive financial assistance for job-related accidents and injuries without having to prove fault. This protects both employees and employers in this industry where risks like slips, falls, repetitive motions and lifting can easily lead to workplace accidents. The estimated cost for this insurance is typically between $1.50 to $2.50 per $100 of total payroll. Factors like safety protocols and claims history can impact the final rate.

Category	List
Benefits	It provides benefits to injured employees such as medical expenses, wage replacement, permanent disability benefits, or death benefits It protects the business from lawsuits in the event an employee is injured on the job It demonstrates the business’s commitment to employee well-being and safety It helps retain valuable employees by ensuring they will be taken care of financially if an injury occurs on the job It provides peace of mind for both employees and employers
Use Cases	Slip and fall injuries from accidents in the retail store Repetitive stress injuries from tasks like folding clothes Being hit by falling boxes or heavy merchandise while stocking shelves Cuts or punctures from blades or needles while unpacking shipments Strains or sprains from lifting heavy boxes of merchandise

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Benefits

It provides benefits to injured employees such as medical expenses, wage replacement, permanent disability benefits, or death benefits
It protects the business from lawsuits in the event an employee is injured on the job
It demonstrates the business’s commitment to employee well-being and safety
It helps retain valuable employees by ensuring they will be taken care of financially if an injury occurs on the job
It provides peace of mind for both employees and employers

Use Cases

Slip and fall injuries from accidents in the retail store
Repetitive stress injuries from tasks like folding clothes
Being hit by falling boxes or heavy merchandise while stocking shelves
Cuts or punctures from blades or needles while unpacking shipments
Strains or sprains from lifting heavy boxes of merchandise

For clothing and clothing accessories retailers (NAICS 458110), the average workers’ compensation insurance rate is estimated to be between $1.50 and $2.50 per $100 of payroll. This pricing is derived based on historical loss data for this industry which shows a lower risk level compared to other retail industries due to less chance for serious injuries. The final rate would depend on factors like employee job roles, safety protocols, and company-specific loss history.

Estimated Pricing: $1.50-$2.50/100 of payroll

Commercial Cyber Liability Insurance

Commercial cyber liability insurance provides key financial protections for clothing and clothing accessories retailers from a variety of cyber risks and threats. It helps protect them from costs related to data breaches, network security attacks, privacy violations, business interruption from outages, and other cyber incidents that could have financial and legal impacts on their business operations. The estimated average annual premium for a retailer in this industry with $5-10 million in annual revenue would be around $3,500 according to typical insurer rating factors. Cyber liability coverage can help address risks from top threats like data breaches, malware infections, third party claims, regulatory actions, and loss of income from attacks.

Category	List
Benefits	Data breach coverage and expense reimbursement Network security and privacy liability Regulatory defense & penalties Website media content liability Cyber extortion coverage Business interruption expense reimbursement Public relations expense reimbursement
Use Cases	Data breach or privacy violation leading to a potential lawsuit from customers Ransomware or malware infection that disables critical systems or steals customer data Loss of business income and extra expenses due to a cyber attack or network outage Liability claims from third parties due to sharing of customer data Regulatory fines and penalties from privacy violation investigations

Based on reviewing average cyber insurance rates for businesses in the retail industry with annual revenues between $5-10 million, the estimated average annual premium would be around $3,500. This pricing is derived from typical factors insurers examine like annual revenue, number of customer records that could be exposed in a breach, compliance with PCI standards, and use of risk management tools and services.

Estimated Pricing: $3,500

Directors And Officers Insurance

Directors and officers (D&O) insurance provides protection to directors and officers of companies from liabilities arising out of claims made against them due to wrongful acts or errors committed while discharging their duties on behalf of the company. It covers costs of legal defense, settlements, and adverse judgments against the individuals. D&O insurance is especially important for clothing retailers as they face certain risks like slip and fall accidents and product liability claims related to items sold in their stores. D&O insurance helps protect the business and individuals should any claims arise from their management decisions and oversight of company operations. It ensures the company has the funds to defend itself, its directors and officers against covered legal actions. Directors and officers insurance, also known as D&O insurance, protects the personal assets of directors and officers from lawsuits alleging wrongful acts or errors committed in their roles. Retail businesses in the clothing and accessories industry often face risks of various types of lawsuits. D&O insurance helps protect the personal assets of directors and officers in these situations.

Category	List
Benefits	Protects business owners and managers from lawsuits related to their job duties Covers legal fees and payouts if directors/officers are sued for wrongful acts or errors in judgment Protects personal assets of directors/officers from claims and judgments Covers defense costs even if allegations turn out to be groundless Covers claims brought by regulatory agencies for violations of laws and regulations Provides access to experienced legal counsel
Use Cases	Shareholder lawsuits alleging mismanagement of funds Employment lawsuits from disgruntled employees alleging wrongful termination, discrimination, harassment etc. Product liability lawsuits from customers alleging defects or harm caused by products sold Lawsuits from vendors or suppliers alleging breach of contract or disputes around payments

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Benefits

Protects business owners and managers from lawsuits related to their job duties
Covers legal fees and payouts if directors/officers are sued for wrongful acts or errors in judgment
Protects personal assets of directors/officers from claims and judgments
Covers defense costs even if allegations turn out to be groundless
Covers claims brought by regulatory agencies for violations of laws and regulations
Provides access to experienced legal counsel

Use Cases

Shareholder lawsuits alleging mismanagement of funds
Employment lawsuits from disgruntled employees alleging wrongful termination, discrimination, harassment etc.
Product liability lawsuits from customers alleging defects or harm caused by products sold
Lawsuits from vendors or suppliers alleging breach of contract or disputes around payments

Based on typical pricing factors such as annual revenues, number of employees/directors, insurance limits, deductibles, prior claims etc, the estimated average annual premium for a D&O policy for businesses in the Clothing and Clothing Accessories Retailers industry with NAICS Code 458110 would be around $3,500. This price was derived from typical industry benchmarks, where the average revenues for businesses in this industry is around $750,000 and they have approximately 10 employees.

Estimated Pricing: $3,500

Conclusion

Taking the time to understand your insurance needs and properly insure your business is important for any clothing or apparel retailer. The right policies can help protect you from unexpected costs that could threaten the viability of your operations. Consult with an insurance broker to get tailored recommendations and pricing for policies matching your specific risks and circumstances.

Frequently Asked Questions

What are the key business insurance policies clothing retailers should consider?

Key business insurance policies clothing retailers should consider include general liability insurance, commercial property insurance, commercial umbrella insurance, business interruption insurance, commercial auto insurance, workers’ compensation insurance, commercial cyber liability insurance, and directors and officers (D&O) insurance. These policies help protect the business from financial losses related to lawsuits, property damage, business interruptions, vehicle accidents, employee injuries, cyber incidents, and legal actions against owners/managers.

What does general liability insurance cover for clothing retailers?

General liability insurance for clothing retailers covers bodily injury and property damage claims from customers in the store, lawsuits if their premises or products cause injuries, product liability claims if a item defect causes harm, and incidents during delivery/transportation of goods. It protects the business from expensive litigation costs.

What types of losses does commercial property insurance cover?

Commercial property insurance for clothing retailers covers property losses from fire, weather events, theft, vandalism. It reimburses repair/replacement costs if the building, fixtures, inventory are damaged. It also covers temporary relocation expenses if the premises becomes unusable, and loss of business income if operations are interrupted by a covered incident.

What is the purpose of commercial umbrella insurance for clothing retailers?

Commercial umbrella insurance provides additional liability protection above the limits of general liability and commercial auto insurance policies. It helps ensure adequate coverage for lawsuits, protects owners’ personal assets, and lowers total insurance costs with one higher-limit policy.

What does business interruption insurance cover for clothing retailers?

Business interruption insurance covers the loss of income/profits if property damage from events like fires or storms forces temporary closure for repairs. It also reimburses ongoing expenses like rent, utilities, payroll during periods where business operations are disrupted.

What types of risks does commercial auto insurance cover for clothing retailers?

Commercial auto insurance protects clothing retailers financially from legal liability, medical payments and vehicle repairs/replacements if company vehicles are involved in an accident. It covers business-owned vehicles like delivery vans, legally-obligated compensation for injured employees using vehicles for work, and liability claims caused by company or rental vehicles.

What is the purpose of workers’ compensation insurance for clothing retailers?

Workers’ compensation insurance provides benefits like medical coverage and lost wages to employees injured on the job at clothing retailers. It ensures employees are financially assisted for work accidents without having to prove fault of the employer. This protects both the employee and the employer from lawsuits over injury claims.

What types of cyber risks does commercial cyber liability insurance cover for clothing retailers?

Commercial cyber liability insurance covers costs associated with data breaches, network security attacks, privacy violations like unintentional sharing of customer data. It protects clothing retailers financially from lawsuits, regulatory fines, business interruption expenses and public relations costs from covered cyber incidents involving theft or compromise of customer information.

What is the purpose of directors and officers (D&O) insurance for clothing retailers?

D&O insurance protects the personal assets of owners and managers at clothing retailers if they are sued over wrongful employment acts, mismanagement allegations, or errors in business judgment. It covers legal defense costs and settlements for claims against directors and officers in their roles on behalf of the company.

What factors determine insurance rates and premium costs for clothing retailers?

Key factors that impact insurance rates and premium costs for clothing retailers include number of employees, annual revenues or payroll, claims history, risk control measures in place, and policy limits/deductibles selected. Generally retailers with fewer staff, lower revenues/payroll, good safety practices and no prior major claims will qualify for lower average rates. Location, business operations, and vehicles used also affect certain insurance costs.

Top Business Insurance Needs for Clothing and Apparel Retailers (NAICS Code: 458110)

Key Takeaways

Introduction

General Liability Insurance

Commercial Property Insurance

Commercial Umbrella Insurance

Business Interruption Insurance

Commercial Automobile Insurance

Workers’ Compensation Insurance

Commercial Cyber Liability Insurance

Directors And Officers Insurance

Conclusion

Frequently Asked Questions

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