A souvenir and gift shop on International Drive does most of its business with visitors: families coming from the resorts, convention groups and tour buses that stop for an hour on the way back to the hotel. The shelves hold T-shirts, plush toys, magnets, novelty candy and imported trinkets, and a busy Saturday brings thousands of people through the door. One week, a toddler chokes on a small piece that broke off a cheap imported toy, and a few weeks later the owner receives a cease-and-desist letter claiming that a line of T-shirts copies a famous character. Neither situation is covered the way the owner assumed.
Gift shops in Orlando range from souvenir stores along International Drive and US-192 in Kissimmee to boutiques on Park Avenue in Winter Park and specialty shops in Lake Nona, Celebration and Winter Garden. They are generally considered low-hazard retail, and many qualify for an affordable business owner’s policy. But Orlando’s tourist economy creates exposures that a generic retail policy does not address: heavy foot traffic, imported merchandise, intellectual property questions, seasonal staffing and a lot of shoplifting.
Foot Traffic and Slip and Fall
The everyday liability claim in a busy gift shop is a customer who trips, slips or is hit by something falling from a display. Tourist stores see more people in a weekend than many retailers see in a month, often including small children, strollers, wheelchairs and visitors carrying shopping bags in crowded aisles. Floors wet from afternoon rain storms, overloaded shelves, top-heavy displays and items stacked overhead all produce claims. Regular floor checks, secured fixtures, wide aisles and a written incident report every time someone is hurt are the defense. Our page on retail business insurance covers the general liability side of retail.
Imported Merchandise and Product Liability
Much of what souvenir and gift shops sell is imported, and a lot of it comes from small overseas manufacturers through distributors with little or no insurance. When a product injures a customer, such as a toy that breaks into a choking hazard, a candle that ignites, a cosmetic that causes a reaction or a novelty item with a sharp edge, the retailer can be named in the claim. If the manufacturer has no U.S. presence and the distributor is uninsured, the store may be the only business left to pay.
Children’s products deserve particular attention, because federal safety standards cover choking hazards, lead content and labeling, and recalls happen regularly. Buy from suppliers who can show product testing and certificates of insurance, ask for vendors’ endorsements naming your store, keep records of where each product came from and watch for recall notices. If you sell products under your own label or design your own merchandise, tell your agent, because that changes your products exposure. Our article on product liability for private-label brands explains how that works.
Character Merchandise and Intellectual Property
Orlando gift shops sit next to some of the most protected brands in the world, and merchandise that copies characters, logos or park imagery without a license can lead to cease-and-desist letters, seizures and lawsuits. General liability policies cover some advertising injury claims, but they usually exclude claims for selling infringing or counterfeit goods, so a store that stocks unlicensed character merchandise may have no coverage at all. Buy licensed products from authorized distributors, keep invoices that show where merchandise came from and be cautious with designs that look like someone else’s characters or trademarks.
Theft and Shrinkage
High-traffic tourist stores lose inventory to shoplifting more than most retailers, and theft by employees adds to it. Property coverage usually limits or excludes losses discovered only at inventory, and theft by employees is excluded entirely, so crime coverage is what responds to employee dishonesty and money losses. Cameras, clear sight lines, staff positioned near the door and inventory tracking reduce the loss. Gift shops that stay open late along International Drive also handle a good deal of cash, so limits on register cash and regular deposits matter.
Card Payments and Customer Data
Most visitors pay by card, many from other countries, and gift shops that sell online or ship purchases home collect names, addresses and payment information. A breach of the point-of-sale system can lead to notification costs, card brand penalties and claims. Cyber liability covers breach response and defense, and some policies include coverage for payment fraud and social engineering. Shops with an online store should also read our article on e-commerce insurance for Florida online sellers.
Consignment, Local Artists and Inventory Value
Boutique gift shops in Winter Park, Celebration and downtown Orlando often sell work from local artists on consignment. Consigned goods belong to the artist until they are sold, so they are property of others in your care, and a standard property policy may cover them only through a small extension. If consignment is a meaningful part of your inventory, increase the limit for property of others and put the consignment terms, including who insures the goods, in writing.
Inventory value also changes with the seasons. Shops stock up before the holidays, spring break and summer, and a contents limit set for an average month may not cover a fire or hurricane loss at the peak. Some carriers offer a peak season endorsement that raises the limit for the months you need it.
Seasonal Staff and Workers’ Comp
Tourist-area gift shops add staff for summer, spring break and the holidays, and many cross the workers’ compensation threshold during those months. Florida requires workers’ compensation for non-construction businesses with four or more employees, counting part-time and seasonal staff. The common injuries are lifting strains, ladder falls while stocking, cuts from box cutters and slips. Our article on whether you need workers’ comp in Florida explains how the state counts, and for shops with constant turnover, our article on pay-as-you-go workers’ comp explains how to avoid a large audit bill.
Leases, Kiosks and Resort Locations
Gift shops in tourist plazas, malls and outlet centers usually sign leases with detailed insurance sections: liability limits that can be higher than a small shop expects, the landlord as additional insured, a waiver of subrogation and coverage for the build-out. Kiosks and carts in malls carry their own requirements, and shops operating inside hotels and resorts under concession agreements often have to meet the resort’s insurance standards, which can be strict. Read those requirements before signing. Our articles on insurance for independent retailers in malls and shopping centers and what your contract requires from your insurance explain those terms.
Storms Reach Orlando Too
Central Florida is far enough inland that owners sometimes underestimate hurricanes, but storms regularly bring damaging wind and flooding rain to Orange and Osceola counties. The windstorm deductible on most policies is a percentage of the property limit, so convert it to dollars before the season. Flood is never covered by the property policy, and heavy rain floods parking lots and storefronts well outside mapped flood zones. Business income matters as well, because a closure during the summer peak or the holidays costs far more than one in a slow month. Our article on commercial property insurance in Orlando covers the property side.
What Orlando Gift Shop Owners Should Confirm
-
Do your suppliers provide certificates of insurance and evidence of product testing, especially for children’s products?
-
Do you sell any unlicensed character or brand merchandise?
-
Does your policy describe products you design or sell under your own label?
-
Is crime coverage in place for employee theft and cash?
-
Do you have cyber coverage for card payments and online sales?
-
Do you sell consigned goods, and is your property of others limit enough?
-
Does your contents limit cover peak-season inventory?
-
Do you have workers’ compensation for your seasonal staff?
-
Does your policy meet every requirement in your lease or concession agreement?
-
What is your windstorm deductible in dollars, and do you need flood?
Gift Shop Insurance in Orlando With Prestige
Prestige Insurance Group has an office in Orlando and insures gift shops, souvenir stores, boutiques and specialty retailers across Orange, Osceola and Seminole counties, from International Drive and Kissimmee to Winter Park, Lake Nona, Celebration and Winter Garden. We work with over 100 MGAs and specialty markets, so a shop with heavy tourist traffic, imported merchandise or a resort location can be placed with a program that fits. Spanish-speaking owners can also read our guía de seguros para negocios en Orlando y Kissimmee. Send us your current declarations page and your lease, and we will show you where the gaps are. Call the office nearest you. Se habla español.
Orlando: 407-993-2331 Miami: 305-969-8776
General information only, not legal advice. Policy forms, product liability, intellectual property exclusions, children’s product rules and carrier appetite vary and change over time. Refer to your actual policies, lease and supplier agreements for the terms that apply to your business.
