14 Jul Shops and retail outlets – Understanding business insurance

As a small business or retail start-up, it may be tempting to think that you can save some money by skimping on your business insurance for shops. But getting the right cover can be the best decision you ever make.

Firstly, shop insurance is so much more than just covering the value of your stock, it extends to protecting you from third party claims and it could even pay out if you are unable to trade for a reason outside of your control – in fact business interruption cover has been one of the insurance industry’s hot topics over the course of the coronavirus pandemic – so, it’s an important factor to consider when getting a business insurance quote.

Business insurance basics

It pays to know what you want and need before shopping for a business insurance quote. The following are the types of cover that all retail and shop businesses need:

Buildings insurance: When running a shop business with premises, you’ll either be an owner occupier or a tenant on a commercial lease. As an owner, you’ll need to purchase buildings cover to protect your business should there be an event, such as a fire or flood, which leads to damage to the fabric of the building and repairs are needed.

If you rent the property, check with the landlord that the buildings are insured.

Shop contents: Your buildings insurance should, as a general rule, cover items that are a permanent part of the building, such as doors, windows, floors, and staircases (if you have a commercial lease, check with the owner what their buildings insurance covers before valuing your contents insurance), Anything you have added such as shop counters, racks and the stock that you sell should be factored in when considering shop contents and equipment insurance.

Public liability: It is your duty under health and safety laws to make your premises as safe as possible, but, If a visitor, customer or member of the general public suffers illness or injury as a result of visiting your premises, they may make a claim for compensation. Public liability insurance covers the cost of any damages award.

Employers’ liability: This cover is legally required if you have one or more staff and provides protection for claims made in relation to occupational illness and injury.

Business interruption: Following the coronavirus pandemic, which significantly interrupted many shops’ trading ability during 2020/21, business interruption insurance became a spotlight issue.

Traditionally, business interruption insurance is used to cover a business if it cannot trade for a reason beyond its control. Speak to an expert shop business insurance provider to make sure the cover you are buying is suitable for your needs and that it covers the risks that are important to you.

Other items to add to your business insurance package

Depending on the type of premises you trade out of and the type of business you run, you may want to purchase other types of cover as a part of your commercial insurance package. These could include:

• Glass cover: for shop front breakages
• Legal cover: in the event of a third party claim against you
• Loss of licence: covers for loss of income/business value if you lose your licence to sell alcohol
• Frozen stock: If your business relies on frozen products, this cover provides protection in the case of freezer failure which destroys your stock.

Other insurance issues to think about

Depending on the type of business you carry out from your shop premises, there may be other types of shop insurance and certain exclusions that you need to consider, including:

• Manual work away exclusions: for instance if you sell items from a shop premises that require delivery and installation to another site your basic shop insurance is unlikely to cover this manual work which is carried out off the shop premises.
• Accident damage: specific cover for other types of accidental damage and risk other than fire flood, theft etc.
• Violent theft and break-ins via forced entry: optional cover if your business is perhaps at risk of walk in theft (such as jewellery shops and businesses that might hold large sums of money in a cash register).
• Serving food: commercial kitchens have specific risks associated with the use of fryers and cooking ranges and these may need to be covered with a separate policy.

Seek specialist business insurance for shops with Tredstone

Tredstone’s advisers take the time to ensure your commercial insurance package for a shop or retail outlet provides the perfect combination of value for money alongside the robust cover that you need.

Contact Tredstone today.