Retailers invest huge amounts of time and money in their business. They do everything in their power to expand their store and achieve growth, often on a global scale. However, one of the biggest challenges facing retail businesses is that mishaps can occur to anyone at any time. You may have hired phs.co.uk to ensure the highest standards of hygiene and safety, but this doesn’t guarantee protection from problems like natural disaster and theft.
If you have a bricks-and-mortar store, a customer might slip and fall on your premises, potentially severely injuring themselves. Or, an accident could befall a staff member because of the misuse of electrical equipment. The owner of the business is liable for these kinds of accidents. You will likely need to compensate your employees, customers, or business associates for whatever damage they suffer because of your negligence.
Other than physical accidents, many retailers suffer regularly from theft and vandalism. This shows us the importance of protecting your business from mishaps, whether it is weather-related damage to your stock or a theft. That’s where retail insurance comes into the picture.
What is Retail Insurance?
Retail insurance gives businesses protection from losses, accidents, lawsuits, and financial crises. For example, somebody could file a lawsuit against your business for damaging their property, or your inventory could be damaged during a storm. The right retail insurance can protect you and your business from almost any accident that would otherwise get you into financial and legal trouble.
Although the accidents covered by the insurance depend on the insurance policy you purchase, here are a few common areas that most types of retail insurance typically cover:
- Accidents that cause physical injuries to your employees/customers and damage others’ property
- Natural disasters, weather fluctuations, and other events that hurt your business
- Data leaks, breaches, and other similar violations
- Employee injuries at work
Retail insurance is not only for bricks-and-mortar stores, but all types and sizes of businesses, including eCommerce stores, need retail insurance. From a small florist or local jewelry business to a large grocery store, retail insurance is a must for every retailer.
Before you invest in retail insurance, take a survey of all your business assets that have a monetary value. Suppose your warehouse catches fire and burns all your stock, computers, cameras, and security equipment. Before you can claim the insurance, you’ll need to show the loss you’ve suffered and how much it will cost to replace or repair of the damaged items.
What Type of Retail Insurance Does Your Business Need?
Generally, any retailer with a physical store needs commercial property insurance and general liability insurance. Here’s what general, commercial, and other retail insurance covers.
Commercial Property Insurance
This type of insurance offers your physical store protection. It covers your business from damage that occurs due to theft, vandalism, vehicles, weather, and environmental elements. You’ll be covered for the retail stock in your store, as well as the property itself.
For example, if your book store gets destroyed by a flood, the insurance company will pay for the replacement of your books.
Commercial property insurance protects your building and its assets from certain events. No matter what the level of damage, you can rest assured that the insurance will cover the repair and replacement of your lost and damaged assets. In fact, some commercial property insurance policies offer coverage for others’ belongings that are on your premises. However, most policies only cover certain types of events, so it’s important to read the fine print and check what is covered.
Liability Insurance
Business liability insurance protects customers, visitors, and business associates who visit your store. Any accident that causes physical or financial damage to your visitors will be covered by liability insurance.
For example, let’s say a customer slips on the wet floor at your grocery store and breaks their leg. Liability insurance will cover the medical cost, legal fees, and other charges associated with the damage. In short, liability insurance offers coverage for all types of accidents where you are liable.
Business Interruption Coverage
One thing we’ve learned from the COVID-19 pandemic is that every business owner needs to be prepared for a crisis, economic or otherwise. All businesses, from the smallest retail stores to large companies, were greatly affected by the pandemic and most suffered dramatic loss of revenue. If your business has to shut down temporarily due to weather damage or other problems, business interruption coverage will compensate you for some of your lost revenue.
How Much Does the Retail Insurance Cost?
The cost of retail insurance varies depending on what it covers exactly. The more your insurance covers, the more you will pay for the policy. Other factors that can affect the cost of your retail insurance include:
- Location of your store
- Number of employees
- Size and nature of your business
- Business assets
- Previous claim history
For example, home-based business that operates fully online will pay less for retail insurance compared to a bricks-and-mortar store.