How much does insurance cost for clothing stores and boutiques?
The cost of clothing store insurance depends on the policies you choose, the unique risks your shop faces, and the value of your business property. Save on small business insurance costs by comparing quotes from different providers with Insureon.
Average clothing store insurance costs for top policies
Here are the top retail store insurance policies purchased and their average monthly costs:
- Business owner's policy (BOP): $136 per month
- General liability insurance: $43 per month
- Workers' compensation insurance: $65 per month
- Commercial umbrella insurance: $67 per month
- Commercial auto insurance: $214 per month
- Cyber insurance: $58 per month
Our figures are sourced from the median cost of small business insurance policies purchased by Insureon clothing store small business owners. The median offers a better estimate of what your business is likely to pay because it excludes outlier high and low premiums.
Business owner's policy
Clothing stores, pay an average of $136 per month, or $1,629 annually, for a business owner’s policy.
A business owner's policy, or BOP, bundles general liability coverage with commercial property insurance to cover both third-party risks and your business property. It typically costs less than purchasing each policy separately.
A BOP protects against customer injuries, property damage, and vandalism, along with damage to your clothing store equipment and inventory. Because of its increased coverage and affordability, it’s the policy most often recommended by Insureon’s agents.
This is the average BOP for retail businesses that buy from Insureon:
Insurance premium: $136 per month
Policy limits: $1 million per occurrence; $2 million aggregate
Deductible: $1,000
Small, low-risk clothing boutiques are often eligible for a business owner's policy.
Retail business owners may see higher costs if they choose to add endorsements to their policy. Insurance endorsements, such as business interruption insurance or equipment breakdown coverage, are often recommended to help avoid financial losses if a fire or power outage forces your business operations to cease for an extended period of time.
The cost of a business owner's policy is based on a number of factors, including the value of your property, where you are located, your business income, the number of employees you have, and your specialty.
General liability insurance
Clothing stores pay an average of $43 per month, or $512 annually, for general liability insurance.
A general liability policy helps cover legal fees related to common third-party lawsuits from customers, including those related to customer bodily injury, damage to a client's property, and advertising injury.
General liability coverage often includes product liability insurance, which can help protect your clothing store business in the event a customer becomes ill from one of your products.
This is the average general liability insurance policy for clothing shops that buy from Insureon:
Insurance premium: $43 per month
Policy limits: $1 million per occurrence; $2 million aggregate
The cost of general liability insurance depends on several factors, such as the coverage limits you choose, the size of your business, the amount of foot traffic you have, and any endorsements you may add, such as an additional insured.
Learn more about how your insurance premium is calculated and how to save money on your general liability coverage.
Workers' compensation insurance
For clothing shops, workers’ compensation insurance costs an average of $65 per month, or $781 annually.
This business insurance coverage helps pay for medical expenses if an employee is injured on the job. It also provides disability benefits while they're recovering and unable to work.
To comply with your state’s requirements and avoid penalties, clothing businesses typically must purchase this coverage for their employees. It's also recommended for sole proprietors, as health insurance plans can deny claims for medical bills when an injury or illness is related to your job.
Most policies include employer's liability insurance, which covers the cost of lawsuits related to employee injuries. There's usually no limit to how much a workers' comp policy can pay for employee benefits, though it depends on state laws.
The cost of workers' compensation insurance depends on several factors, including the number of employees you have and the level of risk involved with their jobs.
You can save money on your workers' comp coverage by classifying your workers correctly and implementing a risk management plan to minimize employee injuries.
Commercial umbrella insurance
Retailers, including clothing store boutiques and chain stores, pay an average of $67 per month, or $808 annually, for commercial umbrella insurance, which is available in $1 million increments.
This policy boosts the protection of your general liability insurance, commercial auto insurance, and employer's liability insurance. When a claim exceeds the limits of the underlying policy, umbrella insurance kicks in to provide coverage.
Boutiques may need this type of insurance if a landlord requires liability coverage in excess of $2 million.
For example, a landlord might require you to carry $3 million in general liability coverage before they'll sign a lease. In that case, you could carry $2 million in general liability insurance along with a $1 million umbrella policy to meet this requirement.
The cost of umbrella insurance depends on your risks and how much coverage you buy. You need to buy a certain amount of underlying coverage before you can buy umbrella insurance.
Commercial auto insurance
Retail companies, including clothing shops, pay an average of $214 per month for commercial auto insurance, or $2,565 annually.
Most states require this coverage for vehicles owned by a clothing store. For personal, rented, and leased vehicles used by your business, look to hired and non-owned auto insurance (HNOA) instead.
A commercial auto policy provides financial protection in the event of an accident involving your business vehicle. It can help pay for property damage, medical costs, and legal expenses.
The cost of commercial auto insurance depends on several factors, including the policy limits you choose, coverage options, the value of the vehicles, additional insureds, and the driving records of anyone permitted to drive.
Learn more about how to find affordable commercial auto insurance coverage.
Cyber insurance
Clothing stores and other retail business owners pay an average of $58 per month, or $701 annually, for cyber insurance. You might also see this policy called cyber liability insurance or cybersecurity insurance.
Cyber insurance helps retail businesses recover financially after a data breach or cyberattack. It can help pay for customer notification costs, fraud monitoring services, and other costs necessitated by state data breach laws.
The cost of cyber insurance depends on the amount of personal information handled by your retail business, such as customer credit card numbers, along with the number of employees who can access that information.
Top retail stores we insure
How are clothing store insurance costs calculated?
Clothing store business insurance coverage costs are determined by several factors. While underwriting your policy, insurance companies will consider the following when calculating insurance rates:
- Value of business property and inventory: Clothing stores that sell higher-value inventory, such as designer clothing or handbags, or have a larger amount of inventory will likely have to pay more expensive premiums due to increased risk of theft and property damage.
- Annual revenue and payroll: The more your clothing store makes in a year and the more you pay your employees, the higher your premium will cost. That’s because increased revenue and payroll often indicate more customers and greater exposure to possible claims.
- Size of your store: A small boutique clothing store with less customer traffic will pay less for insurance than a large department store with a higher number of customers.
- Location: If your clothing store operates in an area that is more prone to natural disasters, increased foot traffic, or high crime rates, you may have to pay higher insurance costs than one located in an area where these factors are less present.
- Claims history: A clothing store business with a lengthy list of previous insurance claims will likely pay more for insurance than one with no claims history.
- Types of insurance coverage purchased: Some policies are required to obtain contracts for clothing stores. These required policies often are needed to cover more expensive accidents and lawsuits, which tend to cost more than basic coverages. You can often save money by bundling coverages, such as a business owner's policy.
- Number of employees: The more employees that your clothing store business has on staff, the more opportunities there are for accidents to happen or for potential damage to occur to someone else's property.
- Coverage limits and deductibles: Clothing store companies with higher coverage limits and lower deductibles on their insurance policies will typically see increased premium costs, while lower limits and a higher deductible can help keep their rates lower.
- Types of services offered: The services your business provides, such as custom tailoring or delivery, can influence your insurance costs.
- Security and safety measures: Implementing security and safety measures to mitigate risks can help reduce the number of claims you file, and some insurers may provide discounts for doing so. Examples include installing security cameras and alarm systems to prevent theft, and equipping your store with smoke detectors and sprinklers for fire protection.
How do I get clothing store insurance?
Insureon works with top-rated U.S. insurance companies to find affordable insurance coverage for your clothing store business, as well as other retail businesses such as online retailers, consignment stores, or clothing wholesalers.
Apply today to get free quotes with our easy online application. A licensed insurance agent who specializes in your profession's unique risks will help you find the right types of coverage for your retail business insurance needs. They can also discuss clothing store insurance costs and what amount of coverage best fits your budget.
Typically, you can get a certificate of insurance (COI) within 24 hours after submitting an application, offering instant peace of mind.
What our customers are saying
The average costs on this page were derived from our data on small business owners in the clothing retail field who purchased policies through Insureon. Most of our customers have less than five employees, annual revenue ranging from around $50,000 to more than $200,000, and five years or less in business.
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