What is pawn shop insurance?
Pawn shop insurance is an important layer of protection in the event a claim is made against your business. With a turnover of unusual and potentially valuable items coming into the store, pawn shop insurance is important to not incur huge financial obligations should a claim arise or an item is misvalued and sold for a loss.
Who needs pawn shop insurance?
All pawn shops that deal with purchasing goods from people, offering secured loans to customers using items as collateral, and selling items to new customers should have pawn shop insurance. It protects not only the inventory of the pawn shop, but also the day to day operations of the business itself, such as an employee or a customer getting injured.
What insurance do pawn shop businesses need?
Pawn shops provide a few different services that should all be adequately covered by a pawn shop insurance policy. Typical insurance for a pawn shop can include general liability insurance, workers’ compensation insurance, commercial auto insurance, and more. It is important to look at your business and see where it may be exposed to financial threats to select the correct coverage.
Common types of pawn shop insurance
- General liability insurance
- This type of insurance covers a wide variety of claims that could be made against your business due to accidents and other common risks. It will offer financial protection if someone other than you or your employee(s) is injured, or non-company property is damaged and you are held responsible.
- Commercial auto insurance
- Generally a good insurance to have if you are using a vehicle or trailer to transport materials and tools to project sites or to carry out necessary actions for the job. This type of insurance will cover any bodily injury and property damage claims that arise from an accident involving your work vehicle.
- Workers’ compensation insurance
- If an employee is injured while on the job, workers’ compensation insurance will kick in and cover the costs of lost wages, medical expenses, and rehabilitation. If an employee accuses the business of negligence and opens a lawsuit against the company, employers’ liability insurance will cover the expenses associated with the lawsuit such as court fees, lawyer fees, and settlements. Employers’ liability insurance is usually included in the workers’ compensation policy, but you should always verify the terms of your specific policy.
- Commercial property insurance
- If you rent or own a property to conduct business, commercial property insurance covers any damage to the building, as well as any equipment and inventory that may be in it.
- Business owner’s insurance
- To save some money on the premium, a business owner’s policy combines both the general liability and commercial property insurance into one plan. It is a cost effective way to get coverage for your pawn shop.
What are the limits of pawn shop insurance?
Like all retail storefronts, pawn shops have the items for sale on display and are exposed to the same risks of theft, damage, and lawsuits. The limits you choose for your business should reflect on the size of your store, the inventory you carry or expect to carry, and where your business is located, among other factors. Below are the median limits that pawn shops choose, but your business may require different limits.
| General liability insurance | $1,000,000 per occurrence $2,000,000 aggregate |
| Commercial auto insurance | $1,000,000 aggregate |
| Workers’ compensation insurance | $100,000 bodily injury per accident |
| Commercial property insurance | $1,000,000 per occurrence $2,000,000 aggregate |
| Business owner’s insurance | $1,000,000 per occurrence $2,000,000 aggregate |
How much does pawn shop insurance cost?
There are different factors that can affect how much pawn shop insurance costs. These factors can include the location of your business, the history of claims made, and the number of people your business employs. Grouping policies together with the same insurance provider can help save money through discounts. Below you can find the median costs for each type of insurance mentioned. Your actual premium may vary.
| General liability insurance | $500 annually |
| Commercial auto insurance | $1,704 annually |
| Workers’ compensation insurance | $1,070 annually |
| Commercial property insurance | $790 annually |
| Business owner’s insurance | $1,422 annually |
How to choose the best pawn shop insurance?
There are lots of providers who insure pawn shops. Choosing the right one can be challenging, however there are several ways to determine if a provider is the best option for you. Take some time to sit down and assess where your business is exposed and search for an insurance policy that matches your needs.
- Shop around by collecting different quotes from providers.
- Make an assessment of the risks associated with your business and choose a policy that covers them adequately.
- A provider should be able to customize their existing products to meet your needs. If they are not able to, it may be best to move on to a different one.
- Making sure the provider has an A rating with the Better Business Bureau or similar, credible rating entity. You can also look up reviews by other customers to see what the customer opinion is about the company.
- Providers that focus on building relationships with their customers are almost always willing to work with clients on cost-efficient packages of coverage.