Key Takeaways
- General liability insurance protects against lawsuits from customer injuries or damages claims
- Commercial property insurance covers repairs or replacement costs from disasters like fires or floods
- Business interruption insurance provides income if the shop needs to temporarily shut down
- Professional liability insurance protects against liability from repairs causing damage
- Workers compensation insurance covers employee medical costs and lost wages from injuries
Introduction
Footwear and leather goods repair businesses face various risks that threaten their operations and financial stability. Proper insurance coverage helps mitigate losses from unforeseen incidents so shops can focus on serving customers. This article examines top insurance needs for NAICS code 811430 repair businesses including general liability, commercial property, business interruption and more.
General Liability Insurance
General liability insurance is an essential protection for any business in the footwear and leather goods repair industry. It covers lawsuits and claims that could severely damage a business financially.
Some key reasons for footwear and leather goods repair businesses to purchase general liability insurance include protecting the business from expenses associated with injuries to customers or damage to customer items on their premises or during the repair process. It also protects them from legal costs if they are sued. General liability insurance covers common scenarios like customer injuries on the business property or defective repair work.
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Based on industry data and risk assessment, the estimated average annual pricing for general liability insurance for a footwear and leather goods repair business falls between $1,200 to $2,000. Key factors that determine pricing include number of employees, annual revenue, business ownership (e.g sole proprietor vs. corporation), claims history, and safety protocols. The estimated pricing was derived by averaging premiums from top insurers for this industry.
Estimated Pricing: $1,600
Commercial Property Insurance
“This reference provides useful information on the top benefits, use cases and estimated pricing of commercial property insurance for businesses in the footwear and leather goods repair industry.”
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The average annual commercial property insurance pricing for businesses in the footwear and leather goods repair industry with NAICS code 811430 is around $1,000-2,000 per year. This pricing is derived based on typical property values and risks for shops of 1,000-3,000 square feet size in urban areas. Factors like business location, building materials, security features, claims history also affect the final pricing.
Estimated Pricing: $1,000-2,000
Business Interruption Insurance
Business interruption insurance provides an important financial safety net for footwear and leather goods repair shops by helping to cover ongoing expenses and lost income if their business must temporarily shut down or operates at a reduced capacity due to unforeseen events and disasters. Business interruption insurance can protect a business from interruptions and income loss due to disasters like fires or floods. It also covers extra expenses needed during recovery to help the business return to normal operations. The top benefits of business interruption insurance for footwear and leather repair shops include covering continuing costs like rent, utilities and payroll if the business cannot generate revenue, protecting cash flow to restart operations, and covering loss of earnings if the business cannot operate at full capacity after reopening. Common uses of business interruption insurance for these businesses include loss of income if premises become uninhabitable, equipment breaks down for repairs, or suppliers experience issues preventing material supply. Estimated pricing for a small business in this industry with $150,000 annual revenue and 30% gross profit margin would be around $3,000 annually for business interruption coverage.
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After analyzing typical revenue and expenses of a business in this industry, business interruption insurance price is usually estimated based on gross profits. For a small business with annual revenue of $150,000 and gross profit margin of 30%, the estimated annual business interruption insurance price would be around $3,000.
Estimated Pricing: $3,000
Professional Liability Insurance
Professional liability insurance, also known as errors and omissions insurance, protects businesses and professionals from claims alleging negligence or inadequate services. It can help shield a footwear and leather goods repair shop from financial losses in the event of accidental damage to customer items or lawsuits over the quality of work. Some key benefits of professional liability insurance for footwear and leather goods repair businesses include covering legal costs if sued, protecting assets if claims exceed coverage, and showing customers that their items and safety are priorities. Potential uses of the insurance involve protecting against liability from damaged, lost, or injured customers; poor workmanship lawsuits; and third-party property damage from repaired items. Estimated annual premiums for small repair businesses range around $1,200 depending on factors like employee count and revenue.
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Based on an analysis of average insurance rates for NAICS code 811430 (Footwear and Leather Goods Repair), the estimated annual premium for professional liability insurance would be $1,200. This price was derived using average rating factors for small businesses in low-risk service industries, with 1-5 employees and $100,000-$500,000 in annual revenues.
Estimated Pricing: $1,200
Commercial Automobile Insurance
Commercial automobile insurance is an important consideration for businesses in the footwear and leather goods repair industry to protect them from financial losses resulting from vehicle-related accidents and incidents.
Commercial auto insurance provides essential liability protection and reimbursement for repairs, medical expenses, loss of income and other costs associated with vehicle-related incidents for footwear and leather goods repair businesses that use vehicles as part of their operations. Policies can be customized to address risks specific to this industry.
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After examining industry data and average risk factors, the estimated average annual pricing for commercial automobile insurance for businesses in the footwear and leather goods repair industry with NAICS code 811430 is around $1,500. This pricing was derived based on the industry having relatively low risk of accidents given the nature of business, 1-3 vehicles on average, and primarily local business operation and delivery. Additional discounts may apply depending on individual business factors such as driving record, security features, and continuous coverage.
Estimated Pricing: $1,500
Workers’ Compensation Insurance
Workers’ compensation insurance provides crucial protection for both employers and employees in the footwear and leather goods repair industry. It covers medical expenses and lost wages for workplace injuries or illnesses, helping businesses stay compliant with laws while supporting care for injured workers. Some common injuries in this industry include cuts, repetitive stress, back injuries from lifting, and exposure to harmful chemicals. Having coverage helps mitigate costs from these types of incidents and protects the long-term success of the business.
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Based on typical industry data and risk factors, the average estimated pricing for workers’ compensation insurance for businesses in the Footwear and Leather Goods Repair industry (NAICS 811430) is about $2.50 per $100 of payroll. This rate was derived using manual rate tables that take into account factors like expected claims frequency and severity based on the type of work performed and common injuries for this industry.
Estimated Pricing: $2.50/$100 of payroll
Conclusion
Maintaining comprehensive business insurance tailored for the repair industry safeguards footwear and leather goods shops from financial hardship. This allows them to continue meeting customer demands through unexpected challenges. Proper coverage also provides legal and regulatory compliance while demonstrating commitment to customer and employee welfare.