Furniture Store Insurance: The Five Policies You Need to Protect Your Business

Furniture store owners must balance the excitement of helping customers furnish their homes with the constant vigilance required to protect their business from unforeseen events. While running your store is rewarding, it comes with unique challenges and risks. 

What’s more, the potential for loss can be high in this field, from customer injuries to unexpected natural disasters. According to FEMA, 40% of businesses don’t reopen after experiencing a disaster, and another 25% fail within one year of one.  

Furniture store insurance is a handful of policies designed to protect your business. The right policies protect your physical assets and ensure your operations can quickly recover after covered disruptions. Comprehensive insurance coverage gives you peace of mind so you can focus on keeping your customer base happy. 

This article will explore the five essential insurance policies every furniture store needs, with expert tips from Brandon Corum,  vice president of Personal Lines and Small Commercial Lines at Central Insurance. Whether you are a new store owner or looking to reassess your current insurance coverage, understanding these key policies will help you make informed decisions about your furniture store’s future.

Common Risks for Furniture Stores

Understanding the risks of owning a furniture store is crucial to ensuring you have the appropriate insurance coverage to protect your assets and operations. Here are some of the common risks furniture stores face:

Property DamageCustomer InjuriesEmployee InjuriesDelivery AccidentsSupply Chain DisruptionsFurniture stores face a significant risk of property damage from fire, theft, vandalism, and natural disasters. Additionally, if you offer furniture delivery and installation, your business can be liable for damages caused in customers’ homes. Customers may slip, trip, or fall in your store, leading to potential liability claims and medical expenses. While prevention starts with good housekeeping in-store, insurance coverage can be your safety net.Furniture staff members often lift heavy items and handle various equipment, increasing their risk of injury and the likelihood of Workers’ Compensation claims. In 2021, 31% of workplace injuries were from overexertion, while falls, slips, and trips accounted for 28% of cases.If your business offers furniture delivery services, auto accidents can result in property damage or injuries, posing liability risks. While prevention methods like proper driver training and fleet telematics can encourage safety on the road, accidents can still occur and can be costly. Furniture stores rely heavily on timely deliveries from suppliers. Disruptions in the supply chain, such as delays or shortages, can affect inventory levels and sales. Obtaining business interruption insurance can be a shield against supply chain disruptions. Some stores may want to consider a Peak Season endorsement.

There’s another risk if your furniture store sells white-label products. “Your store can be on the hook for manufacturing the furniture, even if it’s made overseas,” Corum says. “If something happens, the customer can’t sue the manufacturer over in China, so they’re coming back to the furniture store where they bought it.”

With a lack of quality control and an increased dependence on your suppliers, white labeling requires you to take on additional risk. Always ensure compliance with trademarks and patents, follow safety regulations, provide accurate descriptions, maintain high quality in selected furniture, and deliver excellent customer service.

Continue reading to learn the vital coverages to protect your business from these risks.

Furniture Store Insurance: Five Essential Policies

Here are five essential insurance policies every furniture store should consider:

1. General Liability Insurance

General liability insurance is fundamental for any business, including furniture stores. This coverage protects you from claims involving bodily injury and property damage. For example, general liability insurance can cover medical expenses and legal fees if a customer slips and falls in your store or a piece of furniture accidentally damages a customer’s property during delivery. It helps ensure that one mishap doesn’t lead to significant financial hardship.

Real World Example: “Imagine your crew installs a fridge, and water leaks onto the wood floor. It could be a very small amount of water that goes unnoticed, but it sits under the fridge for a few weeks. One day, the homeowner notices that the standing water has caused the wood floors to buckle. Your insurer now owes the replacement cost. We have to match that flooring, and if it’s an older wood floor, we are ripping out every bit of wood flooring in the house and putting new ones in. Losses can be minor in nature and quickly turn into a $50,000 loss.”

2. Property Insurance

Property insurance protects your store’s physical assets, including the building, furniture inventory, and equipment, against risks like fire, theft, and vandalism. Given the high value of furniture store items, property insurance can help you recover quickly from unforeseen damages. Whether it’s a fire that destroys your showroom or a break-in that results in stolen merchandise, this coverage helps you repair or replace what’s lost.

Fires can be catastrophic for furniture stores. “Furniture is combustible; it’s like you’ve got a bunch of kindling and fire starters inside a building, ready to go,” Corum describes. While proper fire risk management is your first defense, comprehensive property insurance can help you rebuild if precautions fail. 

Learn More: Do I Need Commercial Building Insurance for My Business?

3. Business Interruption Insurance

In the event of a disaster, your store might need to close temporarily, leading to lost income. Business interruption insurance provides financial support to cover lost revenue and operating expenses during this downtime. For instance, if a severe storm damages your store and you have to shut down for repairs, business interruption insurance can help you maintain payroll, pay rent, and may cover other essential expenses until you can reopen.

4. Workers’ Compensation Insurance

Your employees are essential to your business, and their safety is a top priority. Workers’ compensation insurance may cover medical expenses and lost wages if an employee is injured. In a furniture store, employees often handle heavy items and operate equipment, increasing the risk of workplace injuries. This insurance ensures your employees receive the care they need and protects your business from related legal claims.

5. Commercial Auto Insurance

Commercial auto insurance is crucial if your furniture store offers delivery services or has company vehicles. This policy may cover vehicles used for business purposes, protecting against accidents, theft, and damage. Delivery drivers are at risk of accidents on the road, and commercial auto insurance can cover the costs of repairs, medical bills, and liability claims. Ensuring your delivery vehicles are adequately insured helps you maintain smooth operations and customer satisfaction.

Business Owner’s Policy (BOP): Easy and Comprehensive Furniture Store Insurance

If you’re looking for a streamlined package to protect your furniture, you may consider a Business Owner’s Policy (BOP). By combining several essential coverages into one bundle, a BOP is designed to simplify the insurance process while providing comprehensive protection tailored to the needs of small and medium-sized businesses.

How do I know if a BOP is right for my business? “You need to look at your scope of operations. A BOP gets everything on one policy with a fixed dollar price if you have a smaller furniture store,” Corum says. “As you get larger, you may consider a commercial package with specific endorsements. If you sell and deliver white-label furniture overseas, you may sell yourself short on a Business Owner’s Policy. Your insurance coverage should scale based on the complexity of your operations, and an insurance agent can help you determine where you’re at.”

Central’s BOP

A Business Owner’s Policy with Central offers many coverage options with plenty of room for customization. Business owners can tailor optional coverages to their unique business needs, such as adding cyber coverage to protect against digital threats if they operate online. With over 70 coverages, our BOP streamlines the quoting process and finding the right coverage for your furniture store business. 

For additional property protection, furniture store owners can turn to the Business Owner’s Property Plus endorsement, which offers a broader range of property-related coverage. In contrast, the Business Owner’s Liability Plus endorsement provides general liability enhancements. Whether protecting your mitigating liability risks or physical assets, we’ve designed our BOP to grow alongside your business.

Learn More: How to Customize BOP to Meet Your Business Needs

Finding the Right Furniture Insurance

After understanding the essential insurance policies needed to protect your furniture store, the next step is finding the right coverage to meet your needs. At Central, we go above and beyond to understand and protect your business. We work closely with policyholders to develop and maintain their own effective loss control programs.

Here are some actionable steps to guide you through the process:

Consult With an Insurance Agent
Contact an experienced insurance agent specializing in commercial insurance for retail businesses. An agent can provide expert advice on the various policies and help tailor a comprehensive insurance plan that suits your store. They can also explain the details of each policy, ensuring you understand what is covered and any exclusions.

Review Policy Details
Carefully review the details of each policy, including coverage limits, deductibles, and exclusions. Ensure the policies cover all the identified risks and adequately protect your assets and operations. Don’t hesitate to ask your insurance agent for clarification on anything you don’t fully understand. Consider bundling multiple insurance policies with a single provider to potentially receive discounts and simplify your coverage.

Regularly Reassess Your Coverage
Once you have secured the necessary insurance policies, reassess your coverage regularly. As your business grows and evolves, your insurance needs may change. Periodically review your policies with your insurance agent to ensure your coverage remains adequate and current.

Remember: Keep detailed records of all your insurance policies, including coverage limits, premium payments, and renewal dates, and any maintenance to your building or changes in business operations. Organize your documentation to make it easier to manage your policies and facilitate the claims process if needed.

The Central Difference

Now that you understand the coverage your furniture store business might need, it’s time to start the conversation with an insurance agent. At Central, we have expert experience and data to help guide your insurance decisions, and together, we can ensure you are purchasing the perfect coverage for your business.

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