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Are you a business owner? Do you own a clothing store, a small “Mom & Pop shop, or a grocery store? No matter what you sell, retail stores face a variety of risks in day-to-day business. Retail business insurance can protect you if something unexpected happens. What small businesses should get retail insurance? What coverage should you get? How much does it cost? Keep reading for all of the need-to-know details.

What Businesses Should Get Retailer Insurance?

Here are just a few examples of stores that should get retail insurance: 

  • Jewelry stores
  • Antique stores
  • Clothing & apparel
  • Grocery & liquor stores
  • Electronics stores
  • E-commerce stores

If you sell products or services to a customer to earn a profit, you should consider getting the proper insurance to protect your retail store.

Insurance For Retail Businesses

What insurance coverages should a small business invest in? Here are a few common types of business insurance coverage options:

Commercial Property Insurance

Commercial property insurance covers the assets of your business including the loss of the building, furniture, equipment, and your inventory If damage occurs due to fire, wind/storms, hail, vandalism, and theft. The policy can either be replacement cost or actual cash value. Be sure to keep an inventory and account for any item that would be replaced if severely damaged or destroyed. The costs to repair damage to a building can often be astronomical, which is why every business owner should obtain this coverage to help protect their business property.

General Liability Insurance

General Liability Insurance is often referred to as “Slip & Fall” coverage. Why? If a customer or vendor slips and falls in in your store, general liability insurance can pay for their medical bills. So what all does it cover?

  • Third-Party Bodily Injury: If a customer or vendor is injured on your premises, you are often liable for the cost of their injury. But if you have general liability insurance, it can cover their medical costs and the potential cost of a lawsuit or settlement. 
  • Third-Party Property Damage: If one of your customers claims their vehicle is damaged by an employee operating a cart machine, this policy can pay to repair the damage. 
  • Advertising Injury: This includes things such as defamation or copyright infringement. If someone claims you used their work or image in your advertising without the proper permission, they can sue you. 

Some commercial general liability policies may include product liability insurance. This protects your business if a product you sell is faulty and injures a customer (or causes them to become sick). If it’s not included in your policy we recommend purchasing it separately to safeguard your business. 

Business Owners' Policy

Some retail businesses may qualify for a special policy offered by an insurance company called a business owners' policy (BOP). It is bundled coverage that typically includes general liability insurance, commercial property insurance, and business interruption (or business income & extra expense). A business interruption policy can help cover lost profits/income, payroll, taxes, and even a temporary location for your retail business to operate if your property suffers damage. A BOP can often be offered at a more affordable price than purchasing each policy separately. 

Commercial Auto Insurance

Does your small business offer home delivery for customers? If so, you must make sure your delivery vehicles are properly covered with commercial auto insurance. Even if you or your employees are using personal vehicles, you should get this coverage. Why? If an accident were to occur and your personal auto insurance found out you were working, they might deny coverage for your claim.

Inland Marine Insurance

Inland marine insurance covers your products while it’s in transit or a customer’s property that’s in your temporary care. If a shipment of goods is in a car accident and its contents are destroyed, this policy will cover the replacement cost (NOTE: Products being transported are usually not covered by commercial auto insurance).

Workers' Compensation Insurance

You have to buy workers' compensation insurance if you hire one or more employees—in almost every state. Workers' compensation insurance covers retail businesses in the case of lawsuits if any of your employees is injured while working. Workers' compensation will also pay lost wages to any workers who are hurt—or become ill—on the job. It will also cover medical costs for the employee. If the employee dies, workers' compensation insurance can pay funeral expenses and support payments to the spouse or children of the employee.

Additional Insurance to Consider

Here are some other insurance policies retailers can consider to include in their business insurance package:

  • Equipment Breakdown Coverage: Do you use expensive equipment in your retail store? Do you have an HVAC system or furnace? If this expensive equipment breaks down to an electrical surge or mechanical malfunction, this insurance can cover the cost to repair the equipment. 
  • Spoilage Coverage: If you suffer a mechanical breakdown of your refrigerated systems or you temporarily lose power, do you have spoilage coverage included in your policy? If your retail business sells refrigerated products, make sure you don’t skimp on this coverage. 
  • Cyber Liability Insurance: If you store customer information on your computer or in a POS system and your data is breached, you could be held liable if a customer’s information is compromised. This insurance policy can cover the cost to notify customers of a breach, pay for credit-monitoring, and in some instances pay for a ransom demand. 
  • Employment Practices Liability Insurance (EPLI): This policy protects small business owners, management, etc. from claims of discrimination, wrongful termination, harassment, etc. It covers the cost of a lawsuit or settlement.

Retail Store Insurance Cost

How much does retailer business insurance cost? An insurance company will take these factors into consideration:

  • Number of employees
  • Annual revenue/income of the business
  • The coverage limits you want
  • The value of your inventory
  • Where your store is located
  • The retail industry you’re in
  • Type of stored customer data

General liability insurance can cost retail businesses anywhere from $450 to $2,000 a year whereas a business owners' policy can cost from $700 to $3,500. It’s best to speak with a knowledgeable agent about the coverage you need. 

Get a Free Quote on Retail Insurance

Our goal at CommercialInsurance.Net is to help you protect your business as efficiently as possible. We want the process of getting a competitive insurance quote to be fast and easy. You can complete the form at the top of the page and one of our specialists will contact you soon. If you want a quote now, you can connect with us by giving us a call at 877-907-5267.


Related Articles: Commercial Property Insurance, Product Liability Insurance, Gift Shop Insurance

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