Insuring sporting goods stores that sell firearms

When it comes to sporting goods stores, the sale of firearms makes the insurance process more complex.

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By Brandon Lilly
Commercial Lines Account Executive

If you're driving down the road in any popular commerce area, you're likely to see stores that sell clothing, footwear, mobile service, coffee … and likely sporting goods. There are about 21,000 sporting goods stores in the U.S., generating a total of $47 billion (that's not a typo!) (stats).

Like many other business, sporting goods stores should have insurance. Most stores can get insurance from a standard carrier without having to go a specialty market. And, many of them will be put on a standard business owners policy (BOP), a package of coverages designed for smaller businesses. 

When it comes to sporting goods stores, there's one part of the business that makes the insurance process more complex - and that's the sale of firearms.

We often get questions from insurance agents wondering if a sporting goods store that has firearms sales should be considered. The answer is, of course. With the right underwriting and risk management, these businesses can make great customers. It just takes an insurance provider that knows the right questions to ask. For example:

What % of gross sales is generated from the sale of firearms?

  • Do they sell new and used guns? Used guns are a tough one. You never know where these guns came from and what the history with a particular gun could be.
  • Does the store run the proper background checks and require photo ID? This is generally a state law, so the majority of stores will be doing this if they plan to stay in business very long.
  • Do they offer any firearms or concealed carry courses?

It's important to ask the right questions when working on a risk management program for a sporting goods store that sells firearms.

It's also important to keep an open mind. There's obviously a lot of controversy surrounding firearms in our country. As an insurance professional, it's our job to look at all aspects of a business operation and make sure they have the right risk engineering in place and the right insurance coverage, regardless of our feelings about firearms.    

A significant majority of sporting goods stores are carrying firearms today. This includes some of the largest retail operations in the industry. When you get the opportunity to review a risk that falls in this category, one of the best tactics is to work as a team - your agency team, the carrier, and any other resources or experts you have at your fingertips.  

State Auto Insurance makes no representations or guarantee as to the correctness or sufficiency of any information contained herein, nor guarantees of  results based upon use of this information. State Auto does not warrant that reliance upon this document will prevent accident and losses or satisfy federal, state and local codes, ordinances and regulations. The reader assumes entire risk as to use of this information.