Do I Need Shop Insurance?
Anton Hilton • June 25, 2020
Is a shop insurance policy a must-have item or something to be left in the clearance section?
A shop insurance policy essentially provides protection to the three key areas of your business. Your ability to trade and operate on a daily basis, your customers and your premises and stock. Whilst ordinarily you would be required to purchase multiple policies to properly safeguard yourself, shop insurance incorporates all these risks into one policy.
To be eligible for a shop insurance policy, the majority of insurers will require you to run a retail business that operates from a commercial property.
So what types of cover feature in a shop policy?
Public Liability - As the owner, it is your responsibility to ensure that your customers are safe when on your premise, however, accidents can and will happen. A public liability policy will cover injury, loss and damage to a third party on your premises. For example - if a customer were to slip on a wet floor with no warning signs, a public liability policy will cover the lawsuit that will arise.
Buildings Insurance – If you own the building you operate out of, then this policy will provide financial assistance should the structure be damaged.
Shop Contents Insurance - As a general rule, anything that isn’t a part of the building’s structure, isn’t covered by a building’s insurance policy. You will need a shop contents insurance to protect the equipment and furniture you need to keep your business running on a day to day basis.
Business Interruption – Should the worst happen like a flood or fire, and you are forced to stop trading, a business interruption policy will assist with the cost of wages, overheads and the increased costs of working expenses.
All the basic needs of a business operating out of a location open to the public are covered by the average shop policy. However, there may be some unique risks that you are looking to cover yourself against, such as protecting specialist stock or legal protection. If you need additional coverage, speak with your broker to see what extra protections can be added.
Examples of optional bolt-ons for shop insurance policies
Shop front insurance – if you rent the building you operate out of, it might be a good idea to speak with your landlord about which features you are liable for and what is covered by their commercial property insurance.
It is common for windows not to be covered by some commercial property policies, so a shop front bolt-on gives you additional protection, not only for the glass itself, but for any displays or signs on your shopfront that might be costly to replace.
Frozen Stock – Should your freezer unit break down, you could potentially lose thousands of pounds worth of stock. Some insurers will offer specialised policies designed to protect your delicate frozen stock.
Legal Cover – Whilst a public liability policy will assist with the legal fees when being sued by a third party, a legal cover policy assists with the legal fees involved in facing legal action that you bring against a third party. It’s best to discuss this cover with your broker, as they can advise on the level of cover you might need.
Whilst a shop insurance policy can include a wide range of protections, there are some unique circumstances that will not be covered by the policy
Are there any exclusions?
Accidental Damage – Whilst most policies will provide cover for damage caused by fire, flooding, etc. many policies do not cover against accidental damage to your property. So, for example, should you damage one of your shelving units you won’t be able to make a claim on a shop policy.
Manual work away – Because insurers define a shop as a business based from a specific commercial premises (a.k.a your shop) the policy will only protect the business that takes place inside the shop (and in some cases deliveries and collections).
However, there are examples of shops where some of the business will take place outside your premises. For example a showroom, which will sell room setups (i.e. bedrooms or kitchens) which will require installation by yourselves. The manual installation work will not be covered by your shop policy.
If you are looking to safeguard your business with a bespoke shop insurance policy, get in touch with us to discuss your needs.
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