Insurance for Bike Shops

Theft – plain and simple. But a common follow-up question remains, “what are the most common claims you see and pay?”. On the shop side, this is often specific to the building and repair of bicycles. If something is done incorrectly by a mechanic and causes bodily injury, those claims can get very large. Whether it’s handlebars or hydraulic brakes not bled properly – we’ve seen multiple claims exceeding 200,000 to 2 million dollars.  From a risk management perspective – it’s worth nothing that insurance carriers are now coming to realize that the training of a mechanic and his/her certification and experience can be tied to the amount and severity of potential claims they might pay in the future. In the future – better rates can be available for shops with properly certified mechanics. 

Many retailers have asked about importing or privately labeling bicycles to sell within your shop. Is there coverage under  your business owner’s policy for these products? Generally – no. The problem here is that most of the manufacturing done overseas is mandated by insurance policies that aren’t recognized in the United States. If you bring a bicycle brand into the states and sell it from your shop, you essentially become the manufacturer from a product liability standpoint. In the same way – if you want to put your own brand on a bike, it’s essentially the same. If something like a frame snaps, you will likely be considered the manufacturer – and your business owner’s policy probably isn’t designed to cover that exposure. 

In many cases when it comes to liability and risk, many bike shop owners assume their business owner’s policy covers just about anything that happens in their business. Unfortunately this isn’t always the case. But there’s good news, Scott – with Marsh & McLennan – has done the legwork to shine light on the questions so many IBDs have about bike shop insurance, and The Bike Cooperative is happy to recommend his enthusiastic expertise.