SIC CODE: 5941 Sporting Goods Stores and Bicycle Shops

Retail Stores/Business and Personal Services
Specific Class Exposures Example: Bicycle Shops

SIC CODE: 5941 Sporting Goods Stores and Bicycle Shops

NAICS CODE: 451110 Sporting Goods Stores

Suggested ISO General Liability Codes: 10150, 10151

Suggested Workers Compensation Codes: 8010

Description of operations: Bicycle shops can sell, rent, assemble, or repair bicycles without motors. Related items such as clothing, shoes, helmets, safety equipment, novelties, and other biking gear may also be offered to customers. Some stores will offer delivery services for larger items. Operations also may sponsor competitions, excursions, events, or tours.

Property exposures are due to flammables such as lubricants, oils, degreasers, and solvents used in the repair operations. They must be properly stored, separated, and controlled. Theft can be a concern due to the attractive nature and high value of the items. These thefts are often from younger criminals who can produce considerable damage to the premises. Appropriate security measures should be present including physical barriers to prevent entrance to the premises after hours and an alarm system that reports directly to a central station or the police department.

Crime exposures are from employee dishonesty and loss of money and securities either from holdup or safe burglary. Employee dishonesty is controlled through background screening, inventory monitoring, control of the cash register, disciplined controls and division of duties. Theft prevention requires controls of monies kept in the cash drawers and regular bank drops.

Inland Marine exposures are from accounts receivable if the store offers credit, bailees customers if the store accepts customers’ items for repair, computers to monitor inventory, exhibitions and goods in transit if the store takes goods to trade shows or other off-premises events, and valuable papers and records due to vendors’ and customers’ records. Backup copies of all records, including computer records, should be made and stored off premises.

Premises liability exposure comes from slips and falls due to public access to the premises. Bicycles are unstable and can turn over easily when knocked into. Supervision of customers as they "try out" the bicycles is important to prevent falls. Floor coverings should be in good condition, with no frayed or worn spots on carpet and no cracks or holes in flooring. Sufficient exits must be provided and be well marked, with backup lighting systems in case of power failure.

Personal injury exposure can come from apprehending shoplifters. Shoplifting procedures must be fully understood and utilized by all employees.

Parking lots and sidewalks need to be in good repair with snow and ice removed, and generally level and free of exposure to slips and falls, especially if there is a "test area" for customers to use. If the business is open after dark, lighting and security must be in place that is consistent with the area.

If vendors provide services, the store should require certificates of insurance verifying appropriate limits of liability.

Any exposure to competitions, excursions, tours, or events, particularly sponsorship of events held outside the United States, needs careful review and evaluation as the shop can incur substantial liability from off-premises operations.

Products liabilityexposure is normally high since the shop owner will provide assembly and repair. All manufacturers’ instructions must be complied with. Rental operations add to the exposure. Direct importing and customizing will increase exposure to that of a manufacturer. Foreign-made items should come from a domestic-based wholesaler.

Automobile liabilityexposure can be high if delivery services are provided. Anyone who uses a vehicle must have a valid license and acceptable MVR. Vehicles should have regular maintenance. If there is no delivery service, the exposure will be limited to hired and nonownership liability for employees running errands.

Workers compensationexposure is from lifting which can cause back injury, hernias, sprains, strains, slips and falls. Employees should be provided with safety equipment, trained on proper handling techniques, and have conveying devices available to assist with heavy lifting. Equipment used in repair operations should be appropriately maintained to prevent injury. In any retail business, hold-ups are possible so employees should be trained to respond in a prescribed manner. The assembly, repair and customization may introduce metalworking that will require eye protection.

Minimum recommended coverage:

Business Personal Property, Business Income, Employee Dishonesty, Money and Securities, Accounts Receivable, Bailees Customers, Computers, Exhibitions, Goods in Transit, Valuable Papers and Records, General Liability, Employee Benefits, Umbrella, Business Auto Liability and Physical Damage, Hired and Nonownership Auto, Workers Compensation

Other coverages to consider:

Building, Leasehold Interest, Real Property Legal Liability, Forgery, Computer Fraud, Employment Related Practices