Shop Insurance – What you need to know
2018 02 06
Shop Insurance policies are designed for retail establishments and businesses running within commercial properties. Therefore, it can actually cover a number of different types of businesses: clothing stores, beauty and hair salons, mini-marts, supermarkets, bike shops etc.
What does shop insurance include?
This type of insurance is designed to protect you in various ways. To begin with it can protect you in the case of loss of product, perhaps due to fire or theft. You can make a claim in order to reimburse your losses, which may be necessary if the loss is of high value.
In the case of a fire, you may need to shut down your business for a number of days, weeks or even months if the damage is particularly severe. This will likely cause a loss of revenue if you have to shut (and are unable to relocate) your business for the entirety of the remodel. Your insurance can therefore help recover financial losses due to the closure of your shop or business.
Furthermore, it can help reimburse you if something happens to the interior of your shop which is severely damaging to your business, such as faulty electrics or plumbing.
How to know if this insurance if for you
This is most likely your insurance of choice if you:
- Are the proprietor of your shop/business, but do not own the building;
- Rely on public footfall in order to carry out your line of work;
- Sell products or provide services in your shop;
- Rely on your shop being fully operational in order to run your business.
Any of the above may suggest that shop insurance is the choice for you. This type of insurance is particularly tailored to retail establishments, thus it considers the line of work for those who run businesses which may involve long opening hours, on-site stock and large engagement with the public.
This is a niche market and thus a multitude of risk factors exist in a retail business, which are potentially not as likely or as prominent in other businesses. Public engagement being a particular aspect to consider: accident, accusation or the mis-selling of a product could result in some sort of legal action and thus this type of insurance can also help with legal fees if the time comes.
Frequently asked questions
Do I need another type of insurance too?
This depends on the nature of the work and the size of your shop/business. You may need to combine it with another type of insurance. If you have a fairly large number of employees, then you have a statutory requirement to have Employers’ Liability Insurance. This protects you and your workers.
Furthermore, if you have a large network of employees, you might find it necessary to also consider D&O Insurance. All of this information is available on our website.
What if I own a chain of stores?
As previously stated, if that means you have a large number of employees, then you are required to have Employers’ Liability Insurance by law.
If you only own the stores and not the buildings, then it would suggest that this type of insurance is for you. This insurance is only particularly lacking if you own the building, as it isn’t incorporated into the main set of factors to protect and thus the premium and pay outs would need to be altered if this was the case.
Do I need this type of insurance if I currently rent the building I run my business from?
As previously stated, yes, this is the best type of insurance for you if you own the business but not the building. This doesn’t mean that you only need shop insurance, you may need to combine it with something else in order to be fully protected. If you are unsure as to what you need or what insurance solution is best for you, speak to a reputable broker for more details.
How much should I expect to pay for shop insurance?
This is really dependant on a set of factors:
- The amount of stock you have on any given day
- The type of business i.e. is an electrical fire more likely to occur due to your line of work?
- The size of the store
- The number of stores you want to insure
- The price/quality of the stock/products you provide etc.
The payments, pay outs and premiums will be devised after you have spoken to an insurance professional about what you need to protect. By all means, shop around to get an idea of how much is a reasonable price, but of course keep in mind the quality of service the company will provide.