Part 1 of a 6 Part Series
This series is specifically aimed at the needs of Bike Shops, however much of it holds true for many other sport-related businesses. The first five articles are written by Scott Chapin has 15 years of experience in insurance and specializes in insurance for Bike Shops. He is with RJF,
a Marsh & McLennan Agency LLC company located in Minneapolis.
Insurance for Bike Events and Bike Shop Activities
by Scott Chapin
RJF, A Marsh & McLennan Agency LLC Company
When evaluating insurance needs, there are typically a few areas that are critical for bike shop owners. I’m going to touch on a few here, including for risks associated with events and shop activities not tied directly to selling products. While not intended to be an exhaustive list, these are some common bike shop risks other retailer businesses may not face.
Bike Tours and Skill Clinics
I see more bike shops offering tours and skills clinics. Often, bike shop owners assume these are covered activities. Unfortunately, most of the time an underwriter will say in their pseudo-analytical (aka: nerdy) way: “The scope of activities allowed for this type of policy is bicycle retail sales and repair. The current rate structure does not account for tours and skills clinics.” In other words, “You’re not covered,” which is definitely not what a shop owner wants to hear. Finding an insurance policy that includes “incidental” tours is at least a step in the right direction toward finding the coverage and protection you need.
It’s more difficult to find coverage for skills. Why? Well…anytime you formally instruct someone, you assume some hidden liabilities if someone gets injured doing the activity you just “taught.” As an instructor, a higher level of accountability and liability is placed on you. A personal injury attorney would ask questions such as:
- “What education/training does the instructor have?”
- “Are they qualified to teach beginners how to do certain skills?”
- “Did they teach it properly?”
If someone gets injured, the attorney’s main goal is to prove your negligence. If negligence is shown (by using such questioning), you, as the shop owner/instructor, may lose the case. The first question they then ask is whether or not your insurance covers this. And guess what? It probably doesn’t.
Bike Events and Races
What about the property and liability exposures for shops that “wrench” on bikes at races, charity rides, etc? Likely, there is coverage included in your policy for these activities, but it is always a good idea to check. There are additional risks for working on bikes right before a race. The athlete is often in a hurry to get their chain, headset, etc., fixed. Make sure it is done right, because you just “volunteered” to fix their bike and if they get hurt, you may be liable. You may need to take out a separate policy for the event itself. There are cost-effective options. If your agent can’t find one, let me know.
Many shops have small events at the shop. Shop rides, product demos with manufacturers’ reps, or repair clinics. Beer (good beer) is often served at these events. What if someone “overserved” themselves and gets in a car accident? Oh boy…it could happen. You better be prepared for this.
Host liquor liability is included in a lot of policies so be sure to check that too. Lots to think about, but it is better to know now then after a claim.