DISCLAIMER: This is only a brief overview of general coverage issues. Actual coverage is determined by the coverage terms, definitions, and exclusions in each individual insurance policy.
Most Common Losses for Fabricare Businesses
Bailee
As a fabricare business owner you are unique. You not only have your own business, property, real estate and earnings to think about. You also have property that belongs to your customers. And you have a responsibility to return that property in good condition so you can avoid common losses.
As the premier insurer to the fabricare industry, NIE can tell you that our most common claim is generated from loss to clothing. And the most common cause of loss to clothing is water damage. Surprised? Well, think about it. There are many ways that water can ruin clothing. Some examples are leaking roofs and ceilings, leaking pipes, broken hoses, flood, sewer back-up and sprinkler leakage. And, by the way, these are all covered causes of loss on an NIE policy as long as the leakage has not been an ongoing problem. We will pay what it takes to re-clean the clothing or pay your customers the fair value of any clothing that cannot be re-cleaned.
After water damage, theft of clothing is a close second. Sometimes employees steal clothing but most often they are stolen during a burglary. We also have clothing stolen from vans and occasionally the whole van is stolen with the clothing in it. Unfortunately, when clothing is stolen it is usually never recovered. That’s when you need to have your insurance carrier step in and pay your customers’ claims. What? You don’t have coverage for customers’ clothing? You need it right away.
Fortunately, the most infrequent cause of loss to clothing is fire. But when it happens, it is a major part of the fire loss in terms of the volume of customers that need to be appeased and the value of the clothing. It is most important for you to keep a set of records/tickets off-premises in case of fire. If you are computerized be sure to back-up daily and take the back-up home. That way you and your insurance company know exactly what was in your store and who it belonged to at the time of the loss.
Burglary
Another one of many common losses is burglary. There is generally a break-in at the premises either by breaking a window or door or by coming in through the roof vents and damaging them along the way. The damage to the premises is most often more costly than the actual amount of cash taken. Often clothing is taken as well, as mentioned above. Not to burst your bubble but, if you have an alarm system, the burglar is usually gone long before the police arrive. This is not to say that you shouldn’t have an alarm. Just don’t expect them to deter a burglar who really wants to get in. They are quick and know many tricks of their trade.
Vehicle Damage
This is one of the common losses that is hard to believe but during a normal year, a vehicle will run into a fabricare business that we insure at least once a month. I don’t think this has much to do with the type of business but more to do with the business being in a strip shopping center. The car pulls up to park in front of a store and the driver hits the gas instead of the brake. This can be a very expensive loss, not to mention that people could be seriously injured. Watch out for this one. In many cases the driver doesn’t have insurance so you will have to rely on your own carrier for coverage.
We have also seen damage to buildings that occurred during the night and the driver simply left. This often happens in a drive-through or at the corner edge of a building. When this happens I often wonder what damage the vehicle sustained and how the owner will explain it to his insurance carrier, if he has one.
Liability
Volumes could be, and have been; written about all the risks a business owner faces from third parties. But in a fabricare business there is an additional risk of trip and fall. Remember that when your customers come and go they are carrying dry-cleaning which may obstruct their view of the floor and surroundings. So be sure to keep all trip hazards such as chairs, plants, gumball machines, cords, etc out of the path of your customers. And keep the carpet and tile in good condition with no breaks, tears or worn spots. Floor mats are good but if they get old and worn or turn up at the edges they should be replaced.
Outside you may have stairs, concrete walks, parking lots, parking stops, etc that can also be trip hazards if they are allowed to deteriorate. So be sure to maintain them regularly.
Be Aware:
The above examples are our most common losses. But this is a very short composition of what can be very complex problems if the proper insurance is not in place at the time of a loss. And there are many types of losses that have not been mentioned here. Be aware of what your risks are. For a comprehensive evaluation of your particular and unique business you should speak to your insurance agent in depth. Do this when you buy the policy and again every year when your policy renews. And if you purchase something new, add or delete a location or take on an additional exposure, such as route service, fire restoration, commercial accounts, be sure to call your agent immediately so that the proper coverage can be placed.