Product Liability Insurance for a store?

Question

I am looking to open a country store. In the store I want to rent out spaces for other vendors. My insurance agent says they need product liability insurance first to protect me. All the vendors are not liking that. One said my insurance should cover everything so they don't have to get any more insurance. Is my agent pulling my chain? Someone with more insight please advise.

Answer 1

Your agent is correct. Each of your vendors should have their own general liability insurance policy, and you should make them prove it with certificates of insurance before you allow them to rent the space. If you own the location, you may want them to add some sort of fire protection for rented premises too. It's comes automatic on a lot of general liability policies. You don't want to be responsible for the products or actions of the people renting space in your store.

For a good example, look at how the malls rent out the small kiosks that you see in the center of the aisles. Each of those small vendors/business owners are required to have a certain amount of coverage before they can have the space, and they need to prove it with a certificate. You should make sure they have at least a one million dollar general liability policy.

Answer 2

Your insurance agent is definitely NOT pulling your chain. Yes, your insurance does cover them if there is some problem. But why should you be held liable for these other vendors mistakes? Make the vendors get General Liability to protect YOU. If your vendors do not want to do this, they are trying to get something out of you for nothing. Don't go into this taking on all the liability.

Once these vendors get the insurance, collect certificates of insurance from them showing the coverage and give copies to your agent. Then thank your agent heartily for looking out for your best interests.

Good luck in your new business!

Answer 3

If the vendor sells something and the product hurts someone, they can sue you because it was sold in your store. Can they win? Even if they don't win, the legal bills can be $10000 to defend you if you don't have insurance company lawyers doing it.
The other answerer said you should get certificates of insurance. Good idea, but I would take it one further and say that the certificate should show you as an "additional named insured".

Answer 4

Of course they don't like it! It's going to be EXPENSIVE! If YOUR insurance is going to cover EVERYTHING, YOU are going to pay their premiums as well as yours! It's not NORMAL. You are acting as the landlord, renting out space. NORMALLY, each tenant carries their own coverage, and pays for their own coverage, and names you as additional insured - landlord, on their policy.

So, your agent is right. They are wrong.

Just think. When was the last time you rented an apartment, and the LANDLORD provided you with all the insurance? Never.

Answer 5

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