Getting business insurance for your record store is essential.
Record stores need to be protected against things like natural disasters or accidents, and theft.
For example, a fire, flood, or earthquake could destroy a significant portion of a record store's inventory and equipment.
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 Record Store
General liability insurance is — generally speaking — one of the most important insurance policies for a record store.
Some of the risks general liability insurance covers are:
- Bodily injury
- Property damage
- Medical payments
- Legal defense and judgment
- Personal and advertising injury
As a record store owner, you may already have a standard business insurance policy in place. However, there are other types of coverage policies that can often be important for your business:
- Property insurance: This covers damage or loss to your physical location and assets.
- Employment practices liability insurance (EPLI): This covers against claims made by employees regarding discrimination, harassment or wrongful termination.
- Product liability insurance: Can protect your business in the event that a customer is harmed by a defective or dangerous product sold at your store.
Purchasing insurance is done through two types of marketplaces: Traditional brick and mortar insurers or online insurers.
- Traditional brick and mortar insurers: Traditional brick and mortar insurance companies have been the norm for decades. These companies offer insurance policies through physical offices, where customers can interact with agents face-to-face. They have higher overhead and this means higher premiums for customers.
- Online insurers: These offer their services strictly over the internet. Online insurance providers are quickly gaining popularity due to their convenience and cost-effectiveness.
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Cost of General Liability Insurance
The average record store in America spends between $300 - $600 per year for $1 million in general liability coverage.
Compare the average cost of general liability insurance for a record store 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 Record Store
Example 1: As an employee moves a box of records across the store, she accidentally knocks a customer over. In the resulting fall, the customer hits his head on a shelf and asks you to cover his medical treatment. General liability insurance would pay for his medical bills.
Example 2: A customer drops off a box of old records so you can assess their value. A fire breaks out in your store a few days later and destroys the records, many of which are collector’s items. General liability insurance would cover the cost to replace your customer’s damaged property.
Example 3: A competitor claims your new marketing campaign criticizes their business and sues you for libel. General liability insurance would pay for your legal fees and any damages awarded in a settlement.
Other Types of Coverage Record Stores 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
You’ve made major investments in your stock of records. If you own the building in which you operate, you’re responsible for all business-related property housed there in the event of a fire, burglary, or natural disaster. Commercial property insurance would cover the cost of replacing your record inventory and other business equipment after an accident so you can recover quickly.
Product Liability Insurance
When you sell products to the public, there’s always a chance a customer may file a lawsuit if they believe one of your products harmed them. Product liability insurance would protect your business by covering your legal fees and any damages awarded in the event of a lawsuit.
Workers’ Compensation Insurance
Most states require businesses to carry workers’ compensation insurance for their part-time and full-time employees. This coverage protects your employees if they become injured at work or fall ill after a work-related accident. It not only covers an employee’s medical bills and lost wages if they need time to recover but also any disability benefits stemming from a work-related accident.
Commercial Umbrella Insurance
While your general liability insurance policy covers most claims, some accidents or lawsuits may be so catastrophic that they threaten to exhaust the limits of your primary coverage. Commercial umbrella insurance protects you from paying out-of-pocket for any legal fees and awarded damages that exceed your primary policy.
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 record 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.
Record Store Insurance FAQ
Can I buy business insurance online for my record 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 record store?
Yes, you’ll want to investigate and purchase business insurance before opening up for business to ensure immediate protection. What’s more, before opening your business you’ll likely have encounters with vendors and others who will be entering your record store, yourself included, so you’ll want protection against unforeseen accidents.
Will insurance protect my record store from everything?
Not necessarily. Certain exceptions may be written directly into your record store insurance policy, and some perils may be entirely uninsurable.
Do I need business insurance if I already have an LLC?
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.