Category: Retail Stores

SIC CODE: 5941 Sporting Goods Stores and Bicycle Shops

NAICS CODE: 451110 Sporting Goods Stores

Suggested ISO General Liability Codes: 18206

Suggested Workers Compensation Codes: 8017

Description of operations: Sporting goods stores may limit their inventory to athletic clothing and shoes, may specialize in a specific sport such as skiing or hunting, or offer clothing, equipment and accessories for a wide range of sporting, hunting and fishing activities. Some will provide equipment rental. Others will provide equipment trade-ins and used equipment sales. Many will provide equipment repair.

Classes may be offered for training in specific sports, such as golf or archery. In some operations, ranges for archery or shooting are connected to the premises. Still others will arrange for excursions such as fishing, scuba, or camping trips. Athletic competitions, exhibitions and special events may be offered or sponsored, both on-site and off-premises.

Property exposures come from a variety of ignition sources plus a heavy fire load from the merchandise carried. Aerosols and plastics add to the fire potential. Any down-filled or fabric items add to the load and are highly susceptible to damage from water, smoke and fire. If the store carries firearms or ammunition, these should be stored away from flammables and in an area inaccessible to customers. If LPG tanks are sold or exchanged, they should be stored in a locked, secure area outside the building. Theft is a major concern because of the street value of athletic shoes and other high-value sporting equipment. 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, 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. All stock should be on shelves that are easily accessible to customers. Floor coverings should be in good condition, 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. If firearms or ammunition are sold, the store must adhere to all state or local requirements and scrupulously keep records of transactions. If equipment is rented, it must be reconditioned before it is rented again.

Personal injury exposures are from dressing rooms, which must be well maintained with privacy carefully guarded, and 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. If the business is open after dark, adequate lighting and appropriate security for the area must be present.

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

Products liability exposure is limited unless there is reconditioning, repair or direct importing of foreign-made equipment. In any of these cases the retailer can assume the responsibility of a manufacturer. Foreign-made items should come from a domestic-based wholesaler.

Automobile liability exposure is generally limited to hired and nonwnership liability for employees running errands. Anyone who uses a vehicle must have a valid license and acceptable MVR. Vehicles should have regular maintenance.

Workers compensation exposure is from lifting which can cause back injury, hernias, sprains, strains, and also from 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. If classes or demonstrations are held or if employees participate in other ways, this concern needs careful evaluation.

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, Hired and Nonownership Auto, Workers Compensation

Other coverages to consider:

Building, Leasehold Interest, Real Property Legal Liability, Forgery, Computer Fraud, Employment Related Practices, Business Auto Liability and Physical Damage