Getting insurance for your bookstore is essential.
Bookstores need protection against operational risks that cause loss or expose them to liability. Such risks include damage to property and financial loss, as well as third-party liability for negligence claims.
For example, an employee may carelessly allow a row of books to fall unto a customer causing distress and injury. The customer sues. Fortunately, there is insurance to cover such a scenario. The policy will provide funds for legal costs, as well as for damages.
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 Bookstore
General liability insurance is — generally speaking — one of the most important insurance policies for bookstores.
Some of the risks general liability insurance covers are:
- Bodily injury
- Property damage
- Medical payments
- Legal defense and judgment
- Personal and advertising injury
Although general liability insurance is designed to cover a wide range of risks, it may not provide coverage for all the risks that your business is exposed to. If that is so, you should obtain specialized policies that offer coverage for these specific risks. Some examples of these policies include:
- Commercial property coverage: This type of insurance covers damage or loss to the bookstore's physical assets, such as the building, furniture, and inventory, due to events like fire, theft, or natural disasters.
- Cyber liability insurance: With the rise of online sales and digital transactions, a bookstore may need cyber liability insurance to protect against data breaches, hacking, and other cyber threats that could compromise sensitive customer information.
- Business income coverage: This type of insurance covers lost income and expenses in the event that the bookstore is forced to close temporarily due to a covered event, such as a fire or natural disaster. It can help the business continue to pay its bills and maintain its operations during the recovery period.
Business coverage can be purchased from either of two types of insurers:
- Traditional brick and mortar insurers: These stalwarts of the insurance industry, include insurers such as AIG, CNA Financial, and Colonial Life & Accident Insurance Company. Their policies may be costly, since they are distributed through large networks.
- Online insurers: Providers, such as Corvus and Next are insurtechs, are able to offer lower premiums, since they have lower operational costs: no branch network to maintain nor any commission payable to agents. They offer greater convenience, as well: insurance can be purchased from the comfort of your home or office.
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Cost of General Liability Insurance
The average bookstore in America spends between $400-$700 per year for $1 million in general liability coverage.
Compare the average cost of general liability insurance for a bookstore to other professional industries using the graph below:
Several factors will determine the price of your policy. These include your:
- 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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Common Situations That General Liability Insurance May Cover for a Bookstore
Example 1: While trying to pull a book from the top shelf, a customer pulls the entire bookshelf down on top of himself. He is injured in the process and requires medical care. A general liability insurance policy will pay the medical bills for the customer’s injuries.
Example 2: A customer brings you a rare book to examine. One of your employees accidentally spills a cup of coffee on the book, ruining it. The customer expects you to pay for a replacement if one can be found. Your general liability policy will pay for the repair or replacement of customer property that is damaged by you or your employees.
Example 3: You choose a logo for your business that you like and begin to use it on your marketing materials. A competitor decides that your logo is too similar to theirs and files a lawsuit against your business. The general liability insurance you have will pay for your legal fees if you are sued by a competitor or a customer, and it will also pay for a settlement if you wind up settling out of court.
Other Types of Coverage Bookstores 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:
Commercial Property Insurance
The books in your store are the foundation of your livelihood. Losing them to an unforeseen event, like a fire, would make it extremely difficult to keep your business going. Carrying a commercial property insurance policy will help you avoid having to pay for replacing your books and other commercial property out of your own funds.
Workers’ Compensation Insurance
The employees in your bookstore need the protection offered by workers’ compensation insurance. This coverage will pay for medical care for employees injured in job-related duties as well as cover the cost of lost wages should the employee be unable to work for a period of time. Workers’ comp is mandated by most states for employers, although the specifics of each state vary.
Commercial Umbrella Insurance
There are limits to a general liability insurance policy. Once those limits are reached, the policy will stop paying, and you will be left to pick up any extra expenses—unless you have commercial umbrella insurance. With a commercial umbrella insurance policy, once your general liability insurance policy limits are reached, the umbrella policy will take over.
Commercial Auto Insurance
If you have a vehicle that you use for primarily business purposes, you will need to have a commercial auto insurance policy. The policy you have for your commercial vehicle will protect you, your employees, and anyone else involved in an accident with the commercial vehicle. It will pay for medical care for the injured and any property damage caused by the vehicle.
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 bookstore:
- 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.
Bookstore Insurance FAQ
Can I buy business insurance online for my bookstore?
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 Bookstore?
Yes. Purchasing business insurance is just as necessary and essential as other setup activities. In some instances, insurance will be required if the business is to operate legally.
For instance, commercial auto insurance, if it has vehicles; workers’ compensation insurance, if it has employees. Importantly also would be liability insurance that protects against risk of physical injury, and loss insurance to cover property damage and financial setbacks.
Will insurance protect my bookstore from everything?
Not necessarily. Certain exceptions may be written directly into your bookstore 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.