The Bionic guide to shop insurance

Les Roberts, Senior Content Manager at Bionic
By Les Roberts, Senior Content Manager

If you run any kind of retail shop, there are all sorts of things that can go wrong and affect the day-to-day running of your business. Anything from missing stock to flood damage can have an impact on whether you can even open at all.

And then there are those things that could even put you out of business completely, like an expensive claim for damages from a customer or an employee. That’s why it’s important to make sure your shop insurance covers you against these risks and more.

What is shop insurance?

Shop insurance is a type of cover designed to protect your business against any risks and claims it might face. This includes things like having to close because of flood damage or facing a claim for a dysfunctional item you’ve sold.

Depending on the type of shop you run, you’ll need a combination of different policies to suit the needs of your business. Whether you sell high-value goods, run a convenience store, or transport stock, having the right shop insurance in place can make the difference between whether you can carry on trading or not.

Is shop insurance a legal requirement?

Shop insurance is made up of several different types of policies, only one of which is a legal requirement. If you employ one or more members of staff, then the law states you must have sufficient employers’ liability insurance in place. This cover protects your business if an employee is injured, falls ill, or even dies while at work or in the workplace.

All other types of insurance are taken out at your own discretion but bear in mind that having the right cover in place is vital to make sure your business is comprehensively protected against the risks it faces.

What does shop insurance cover?

Although the types of cover included in your shop insurance policy will depend on the type of shop you run, it’s likely that you’ll need the following cover in place:

  • Public liability insurance offers cover in case someone is injured, dies, or damages their property while on your business premises (or while you go about your business somewhere else).
  • Employer’s liability insurance offers cover in case an employee is injured, or dies, or damages their property while working for you, either at your premises or elsewhere.
  • Commercial building insurance can cover the cost of repairs to your business premises if it is damaged by fire, flood, or another event listed on your policy.
  • Product liability insurance to cover any claims made if an item you have sold causes injury to someone or damages their property.
  • Stock insurance to cover the cost of replacing your stock if any of it is lost, stolen or damaged. If you deal in frozen foods, you may have to take out separate frozen stock insurance.
  • Business interruption insurance to protect you and your business if a disaster or event listed on your policy means you’re not able to open or operate normally.

What other cover might be available as part of a shop insurance policy?

Depending on the type of shop you own, you might also want to consider the following:

  • Legal cover - This can help with any legal fees when involved in legal action against a third party.
  • Glass cover - This might be included as part of any commercial buildings insurance policy, but it’s worth checking in case damage to shop front windows isn’t covered. It may also be worth looking into ‘shop front’ insurance to cover against damage to signs or other shop front adornments.
  • Loss of licence cover - If you run a business that is licensed to sell alcohol, this insurance will help cover you for the loss of income or drop in the value of your business as a result of losing your license to sell alcohol on the premises.

Are there any exclusions to shop insurance?

When taking out shop insurance, it’s important to check for any policy exclusions so you can take out any extra cover, if necessary. Look out for the following exclusions:

  • Manual work away – Shops insurance provides cover on your specific premises, so if any of your income comes from work away from the premises – say you run a showroom for fitted wardrobes and installation is part of your business – you may need extra cover.
  • Break-ins and damage to property – Your insurer will specify the security measures you need to have in place as part of your property and may not pay out on claims made for theft that has been as a result of doors or windows being unlocked. This means you might need extra insurance that covers public entrances, back doors, windows, out buildings, delivery hatches and service entrances.
  • Serving food - If you cook and serve food from your shop, your public liability insurance should cover you for illness caused by your cooking. However, you may need additional insurance to cover the extra risk posed by equipment like frying ranges.

What affects the cost of shop insurance?

The cost of your shop insurance depends on a number of factors, including:

  • Size - A bigger shop will usually mean bigger claims, which means higher premium prices.
  • Location – As with home insurance, the location of your shop can affect the price you pay for cover. Areas seen as a higher risk will come with higher premiums.
  • Having specialty stock – If you sell valuable or specialist items, these will cost more or be more difficult to replace. This will be reflected in the price of your premium.
  • Number of staff - Having more staff members means more chance of claims being made. This means higher premiums.
  • Licensing – Having an alcohol licence means your shop has additional risks involved. Insurers will charge more to cover these risks.

Why do you need shop insurance?

Shop insurance covers small businesses for financial losses related to employee injury or illness, and damage, loss or theft of your equipment and stock. If your business relies on staff or items of equipment to function, having this type of cover is essential.

Whether you run a shop, an office, or an online store, get in touch with the team at Bionic to make sure your business is covered with quality business insurance.