Bike Rental Business Insurance
Getting bike rental insurance is essential.
Minimally, your bike rental needs to be protected against personal injury claims. Other helpful policies would include umbrella coverage, business interruption, and general liability.
We’ll help you find the most personalized and affordable business insurance coverage.
Recommended: Next Insurance is dedicated to matching small businesses with the right policy at the best price.
Best Insurance for a Bike Rental Business
If you purchase only one type of coverage, it should be general liability insurance.
Some of the risks general liability insurance covers are:
- Bodily injury
- Property damage
- Medical payments
- Legal defense and judgment
- Personal and advertising injury
However, your bike rental business may face other hazards not covered by a general liability policy. Here are three types of insurance to guard against those adverse occurrences:
- Commercial property coverage: Consider this your bicycle insurance policy. A policy of this type could cover damage to any property you own, such as the bicycles and your business premises.
- Business owner's policy (BOP): A BOP combines several types of insurance coverage into one package, including liability coverage, property insurance, and business interruption insurance.
- Business income coverage: Business income coverage provides protection against financial losses that are sustained because the business is unable to operate. Covered business interruptions include fire, flood, vandalism, road closure, and many more.
Let's Find the Coverage You Need
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Bike Rental Insurance Cost
The average bike rental shop in America spends between $400-$1,100 per year for $1 million in general liability coverage.
Check out the chart below for a snapshot of average general liability insurance expenditure across a variety of industries.
Several factors will determine the price of your policy. These include your:
- Location
- Deductible
- Number of employees
- Per-occurrence limit
- General aggregate limit
You may be able to acquire general liability insurance at a discounted rate by purchasing it as part of a business owner’s policy (BOP) rather than as a standalone policy.
A BOP is a more comprehensive solution that includes multiple forms of coverage, such as business interruption and property insurance.
Find the Best Rate
Discover the best coverage at the lowest rate in our cheapest business insurance review.
Common Situations That General Liability Insurance May Cover for a Bike Rental Business
Example 1: A young customer is showing his friend how quickly the chain spins when he cranks the pedal on a bike. In his excitement, he accidentally gets his fingers entangled between the chain and the gears, causing serious injury that requires medical treatment. Your general liability insurance policy will pay for the customer’s medical care.
Example 2: A customer is trying to determine what size bike is best for her by sitting on bikes of different sizes. She tries one that is too tall for her and loses her balance, falling over into other bikes and sustaining injuries. A general liability insurance policy will pay for the treatment of any injuries she sustained in your place of business.
Example 3: One of your employees is transporting multiple bikes on a hand truck through your parking lot when he hits the luxury car of a visitor to your store. The cost of repairing the damage caused to the visitor’s property is covered by your general liability insurance policy.
Other Types of Coverage Bike Rental Shops Need
While general liability is the most important type of insurance to have, there are several other forms of coverage you should be aware of. Below are some of the most common types of coverage:
Crime Insurance
If you rent enough bikes, you will most likely have some stolen. Crime insurance is designed to cover your business when you are the victim of criminal activity like theft. If someone does steal one or more of your bikes, your crime insurance policy will help to cover the cost of replacing them so you can keep on doing business.
Commercial Umbrella Insurance
In the event that your general liability insurance policy limits are exceeded, a commercial umbrella policy will pick up where the general liability policy leaves off. General liability insurance is sufficient for most situations, but there are times when it is not enough—such as when your company loses a significant legal case and is required to pay extensive damages.
Workers' Compensation Insurance
For a bicycle rental shop, it's important to have the right insurance coverage in place, including worker's compensation insurance.
This type of insurance can provide coverage for medical expenses and lost wages if one of your employees is injured on the job while working.
Business Owner's Policy
A Business Owner's Policy (BOP) can be an excellent option for small businesses that rent out bicycles.
A BOP combines several types of insurance coverage into one package, including liability coverage, property insurance, and business interruption insurance.
While BOPs don't typically include coverage for electric bikes specifically, they can provide broader coverage for your business.
For example, if your bikes are stolen, a BOP can provide limited theft coverage, and if they are damaged, a BOP can cover the cost of a replacement bike rental.
Commercial Property Insurance
If you own or lease a space to store your bikes or other equipment, you'll need commercial property insurance.
This type of insurance can provide coverage for damage to your property, including your storage space and the contents inside.
If your bikes are stolen or damaged due to a covered peril, such as fire, wind, or vandalism, commercial property insurance can cover the cost of repairs or replacement.
Note: Theft coverage limited to a bicycle rental shop may not cover other business assets. For this reason, you should discuss your specific bicycle insurance policy with your insurance company to ensure that you have adequate coverage for your bikes and other business property.
Additional Steps To Protect Your Business
Although it’s easy (and essential) to invest in business insurance, it shouldn’t be your only defense.
Here are several things you can do to better protect your bike rental business:
- Use legally robust contracts and other business documents. (We offer free templates for some of the most common legal forms.)
- Set up an LLC or corporation to protect your personal assets. (Visit our step-by-step guides to learn how to form an LLC or corporation in your state.)
- Stay up to date with business licensing.
- Maintain your corporate veil.
Bike Rental Business Insurance FAQ
Yes, absolutely. You will need to first get a quote from an online business insurance provider like Next Insurance. Next allows you to then purchase a policy immediately and your coverage will be active within 48 hours.
A typical business owner’s policy includes general liability, business interruption, and commercial property insurance. However, BOPs are often customizable, so your agent may recommend adding professional liability, commercial auto, or other types of coverage to your package depending on your company’s needs.
"Business insurance" is a generic term used to describe many different types of coverage a business may need. General liability insurance, on the other hand, is a specific type of coverage that business owners need to protect their assets.
It is advisable to purchase insurance before commencing business operations. Failing to obtain coverage from the outset can potentially expose your business to various unforeseen risks and legal noncompliance.
Additionally, certain types of insurance, like workers’ compensation and commercial auto insurance, are legally mandatory. Furthermore, your enterprise may need business insurance to guard against specific risks like property damage and physical injury to customers.
Not necessarily. Certain exceptions may be written directly into your bike rental business insurance policy, and some perils may be entirely uninsurable.
Yes, an LLC is meant to create a legal barrier between your business and your personal assets and credit. If you haven’t formed an LLC yet, use our Form an LLC guide to get started.
An LLC doesn’t protect your business assets from lawsuits and liability– that’s where business insurance comes in. Business insurance helps protect your business from liability and risk.