Bicycle shops are exposed to a number of common liabilities. Customers could be injured by bicycles you sold or repaired, money and inventory could be stolen by outside parties or your own employees, and unexpected disasters such as a fire could devastate your business. The right commercial insurance policies can provide protection from these and other risks, ensuring that you have the financial backing to cope with lawsuits or accidents. 

What insurance do I need for my bicycle shop? 

There are many types of insurance coverage to consider, but these policies are particularly relevant for bicycle shops:

General Liability Insurance

General liability insurance provides protection for incidents of accidental third-party property damage, bodily injury, personal injury, and advertising injury. Bicycle shops thrive on seeing a large number of customers, and with customers visiting your shop and potentially trying out bikes, there’s a chance that someone could get hurt.

General liability insurance can pay for any medical expenses in the case of third-party bodily injury, and it can also cover legal expenses if your business is sued. 

General liability insurance also covers personal injury, including claims of false arrest, discrimination, wrongful ejection from the premises, and invasion of privacy. Protection against personal injury claims is particularly relevant when dealing with suspected shoplifters, who may sue your business if they feel they were treated unfairly or subjected to unwarranted harassment.

Advertising injury is also covered by general liability insurance, which can include claims of slander, libel, copyright infringement, and more.

Examples:

• Bodily injury: A customer is trying out a mountain bike in your store parking lot and hits a pothole. He falls off the bike and breaks his arm. General liability insurance would cover his medical fees and would provide coverage for a lawsuit if he sues. 
• Advertising injury: You advertise a bicycle sale event using cartoon illustrations that resemble a professional artist’s work. The artist sues for copyright infringement. General liability insurance would cover the lawsuit. 

Product Liability Insurance

Product liability insurance protects your company against claims of third-party bodily injury or property damage caused by your products. This is an important coverage for bicycle shops as mistakes in bicycle manufacturing, assembly, or repair can cause bicycle accidents that could result in severe injuries. 

If someone sues your business after being hurt by a defective bicycle, product liability insurance will provide funds to cover your legal fees and any resulting settlements.

Product liability coverage is typically included under the products and completed operations section of a standard commercial general liability policy. However, businesses with a higher risk of product liability have the option to purchase a standalone policy. 

Example:

• Product liability: A customer purchases a new road bike from your shop. Your employees assemble the bike for the customer but end up forgetting to install a key part in the bike’s wheel assembly. This results in the bicycle’s wheel jamming while the customer is riding it. She falls off her bike and sustains a head injury, and she later sues your business for damages. Product liability insurance would provide coverage for the lawsuit. 

Commercial Property Insurance

Commercial property insurance protects the value of your business property if it is destroyed or damaged by a covered hazard. Coverage includes buildings, merchandise, equipment, and other business property.

Property exposures can be high for bicycle stores since they may use flammable oils, lubricants, degreasers, and solvents in repairs. Bicycles are also a common target for theft since they are valuable and easily resold. If an unexpected disaster affects your auto parts store, commercial property insurance can help provide funds to replace or repair any damaged business property. Commonly covered causes of loss include fire, theft, storms, hail, explosion, water damage, and vandalism.

Example:

• Heavy hail shatters windows and skylights at your bicycle shop. Commercial property insurance would pay for repairs to your building.

Business Interruption Insurance

Bike shops heavily rely on their retail spaces. If your shop suffers property damage and you are forced to temporarily close, the financial viability of your business may be at risk. If you must close your business during a heavy shopping season like Christmas, your business could lose a significant amount of revenue. 

Business interruption insurance, also called business income insurance, provides funds to cover lost income and operating expenses if you are forced to temporarily close your business due to property damage from a covered peril. Commonly covered perils include fire, lightning, windstorm, hail, explosion, and vandalism.

Example:

• After a severe storm damages your roof, you must close for several weeks while repairs take place. Business interruption insurance would cover your lost profits, employee salaries, and rent payments while your business is temporarily closed.

Commercial Crime Insurance

Bicycle shops may have a high risk of crime-related losses, as bikes are often targets of theft given their high resale values. In addition, if employees have access to cash registers or safes, there is risk of employee dishonesty. 

Commercial crime insurance can step in to provide financial protection from losses caused by theft, fraud, robbery, burglary, forgery, or other crimes. This coverage applies both to crimes committed by outside parties and crimes committed by your own employees. 

Example:

• A large number of bicycles are stolen from your store. It turns out that one of your employees was behind the theft. Commercial crime insurance would cover the loss. 

Bailee’s Coverage

It’s common for bicycle shops to offer bicycle repair and maintenance services to customers. When your business takes possession of a customer’s bicycle to work on it, you become liable for any damage that happens to it while in your care. Bailee’s customer insurance can protect you from these risks, providing funds to reimburse the loss of customer property while it is in your care, custody, or control.

Example:

• A fire breaks out in your bicycle repair shop, damaging dozens of bicycles that were in the process of being repaired. Your bailee’s coverage will pay for the value of the bicycles, allowing you to reimburse customers for the loss. 

Workers’ Compensation Insurance

Workers’ compensation insurance can cover employees’ medical costs and a portion of lost income if they suffer an injury or illness caused by their job. Workers’ comp also provides death benefits for dependents in the case of a work-related employee death. Bicycle shop employees can be injured while repairing bicycles or lifting heavy items, and trips and falls are also common. 

Most states legally require workers’ comp coverage for businesses with employees. Penalties for failing to secure adequate coverage can be severe, so it’s important to check with your local workers’ comp laws to ensure that your business meets the requirements. 

Example: 

• One of your employees injures her back while lifting a box of bike supplies onto a high shelf. Workers’ compensation would cover her medical fees and a portion of her lost income if she is unable to work while she recovers. 

Additional Coverages

• A business owner’s policy (BOP) combines general liability, property, business interruption, and extra expense coverage into a single package. For small or midsize businesses, this is a convenient insurance product that could help you obtain a wide range of coverage. Premiums for a business owner’s policy are typically cheaper than the cost of buying each coverage separately.
• Cyber liability insurance can cover financial losses that result from cyber events such as data breaches, hacking, viruses, denial of service attacks, and more. If your business accepts online orders or stores customer information like credit card numbers, cyber liability insurance is an important coverage to consider.
• If your bicycle store provides delivery services and you own or lease vehicles in your business’s name, commercial auto insurance is an important coverage to purchase. This insurance type can protect against liability and property damage in the event of a car crash, and it can also protect the value of your business vehicles.

Pricing and Quotes

Pricing for business insurance will vary based on the type of insurance coverage and the risk profile of your business. Insurers consider factors such as:

• Business size
• Industry
• Location
• Number of employees
• Claims history

Businesses with higher risks will have higher premiums than those deemed lower risk. For example, a bike shop with a history of frequent claims will face higher premiums. Premiums also rise as you increase the limits of insurance. Different insurance companies have different models for rating risks, so it is worth comparing pricing across different insurers.

In order to get an accurate estimate on pricing, it’s best to get a quote from a reputable insurance company. Below we’ve highlighted a few of our trusted partners who offer coverage for bicycle shops:

Provider	General Liability	Professional Liability	Business Owner's Policy
Embroker	??	??	??
CoverageSmith	??	??	??
CoverWallet	??	??	??
Hiscox	??	??	??
Thimble	??	??	??

Final Word

Purchasing the right insurance coverage can protect your bicycle store from a variety of major risks, from customer injuries or theft to fires or natural disasters. An unexpected disaster or lawsuit can be financially ruinous. With a wide range of insurance coverage, you and your customers can rest assured that your company will survive any unexpected catastrophe.