Hardware Store Insurance

Getting insurance for your hardware store is essential.

By purchasing insurance, hardware stores can protect themselves from financial risks and help ensure the longevity of their business. 

For example, a customer may slip and fall in your store, or a supplier could sue you for breach of contract. 

We’ll help you find the most personalized and affordable coverage for your unique business.

Recommended: Next Insurance is dedicated to matching small businesses with the right policy at the best price.

Best Insurance for a Hardware Store

General liability insurance is — generally speaking — one of the most important insurance policies for hardware stores. 

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 hardware store may face other risks that a general liability policy doesn’t cover. Specialized types of insurance that can cover some of these risks include:  

  • Product liability insurance: This type of insurance provides protection against allegations of faulty equipment that your store sells.
  • Cyber liability insurance: As a hardware store, you will likely have access to sensitive client information, such as financial records and personal identification data. Cyber liability insurance protects against cyberattacks, data breaches, and other cyber-related incidents that could result in financial loss or damage to your reputation.
  • Business income coverage: This type of insurance provides financial protection in case of a significant business interruption, such as a natural disaster or a major power outage. It covers expenses such as lost income, relocation costs, and extra expenses incurred during the recovery period.

Two types of providers typically offer business insurance:

  • Traditional brick-and-mortar insurers: Traditional insurers cost more because they sell policies using agents who work in physical offices. Traditional insurers also are slower than online insurers. However, they are known for their longevity.
  • Online insurers: Online insurers, such as GoHealth and Next, sell policies online using AI and don’t have physical offices. They’re cheaper and faster than traditional insurers, and they’re our choice for most small businesses.

Find the Right Policy at the Best Rate

We’ve reviewed and tested the major business insurance providers. Let us help you find the best match for your business.

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Cost of General Liability Insurance

The average hardware store in America spends between $500-$1,500 per year for $1 million in general liability coverage.

Compare the average cost of general liability insurance for a hardware store to other professional industries using the graph below:

Graph showing average price of general liability insurance prices per industry

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.

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Finding the most affordable premium starts with getting accurate quotes from highly rated providers.

Common Situations That General Liability Insurance May Cover for a Hardware Store

Example 1:  One of your warehouse stockers runs into a customer with a forklift while stocking inventory. The customer sustains an injury that prevents him from going to work for a month. In this case, general liability insurance would cover fees or settlements related to the accident if the customer files a lawsuit against the business.

Example 2:  A buzzsaw blade is packaged incorrectly and falls out of the box when the customer tries to lift it and bring it to the cashier, injuring the customer’s foot. General liability insurance would cover any medical expenses, legal fees, or settlements related to the accident.

Example 3:  One of your employees goes to a customer’s home to install an air conditioner that the customer purchased in your store. The employee incorrectly installs the unit, which subsequently leaks and eventually causes black mold to grow in the walls. General liability insurance will usually cover this type of situation as long as it can be linked to the initial installation.

Check out our review of the Best Small Business Insurance Companies.

Other Types of Coverage Hardware Storees 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 other types of insurance all hardware stores should obtain:

Commercial Property Insurance

Commercial property insurance covers damage to property you own (such as real estate, tools, supplies, and inventory) that is caused by fire, vandalism, or inclement weather. This is an especially important coverage to have if there are flammable or otherwise hazardous chemicals on site.

Workers' Compensation Insurance

Workers at a hardware store face a higher risk of injury than at many other businesses. Workers' compensation insurance covers your employees’ medical expenses and any legal costs that come as a result of an injury on the job. It is often required for businesses to remain compliant under state law.

Commercial Auto Insurance

All states mandate that a person or business carry auto insurance if they drive vehicles on a public roadway. Whether you are using a vehicle for bank deposits or to run inventory, this insurance will protect against costs related to bodily injury and vehicle damage while driving.

Crime Insurance

Hardware stores often carry small items that can be easily stolen. Although general liability insurance protects your store from common crimes like shoplifting and vandalism, it does not protect from theft by employees. In some cases. crime insurance can also protect your business against any crimes that your employees may commit to your customers while off-site.

Electronic Data Coverage

As a retail store owner, you are likely given access to sensitive personal and financial information about your customers. Many of these clients may be other businesses. It is important that you have protection against deletion, tampering, or theft of that data. Electronic data coverage makes sure your business does not bear the brunt of any crime or inconvenience that may occur because of problems with your data.

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 hardware store:

  • 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.

Business Insurance Is the Best Way to Protect Your Business

If you're starting a new business, then you need business insurance. It's as simple as that. The protection offered by an LLC will protect your personal assets, but your business's assets are still open to liability in the case of a lawsuit or other loss.

Be sure that everything you've built is safe by getting business insurance.

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Hardware Store Insurance FAQ

Can I buy business insurance online for my hardware store?

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.

What is included in a business owner’s policy?

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.

What is the difference between business insurance and general liability insurance?

"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.

Do I need insurance before I start a hardware store?

You definitely should purchase business insurance for your hardware store before opening. If you don’t, you’ll expose your company to legal judgments and other financial risks that you might not be able to pay. 

Many states require workers' compensation and commercial auto insurance to protect employees and the public, respectively. Before opening your hardware store, check your local laws to see what rules apply.

Will insurance protect my hardware store from everything?

Not necessarily. Certain exceptions may be written directly into your hardware store insurance policy, and some perils may be entirely uninsurable.

Do I need business insurance if I already have an LLC?

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.

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