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Shop insurance, also called shopkeeper insurance, is a type of specialised business insurance protection for shops such as high street retailers, businesses in shopping malls and centres, or other commercial premises. Some shop insurance policies also offer coverage for online retailers. So, no matter if your retail shop is virtual or real, you can buy coverage that protects your business.
Owning a shop comes with many risks; this is why insurance companies provide shop insurance. Whether you own and operate a retail clothing shop, a hairdresser shop, a bar, etc. it’s important to protect your customers and business from everyday risks.
We’ve done the research and created this guide to help you learn the basics of shop insurance coverage all in one place.
Shop Insurance FAQs
Who Needs Shop Insurance?
Anyone who owns and runs a business in the retail sector should consider purchasing shop insurance.
All types of shops are covered by shop insurance, including:
- Butcher shops
- Barber shops
- Clothing shops
- And more
What’s the Difference Between Shop Insurance and Shopkeeper Insurance?
Shopkeeper insurance and shop insurance are virtually the same type of insurance protection. Both cover any type of retail shop.
Why Do I Need Shop Insurance?
All businesses face risks every day. There’s no getting around that. So, consider if your shop and stock were damaged or destroyed by a flood, for instance. Without insurance, it would be almost impossible to get your business back and up running.
Another scenario to consider, what would happen if a customer was injured in your shop? Who would pay for possible medical bills, or even worse, a legal suit? Without some type of insurance coverage, you could easily lose your business and livelihood.
Shop insurance offers protection from these and many other types of risks. When you begin shopping for this type of protection, you’ll find that each insurer’s policy may be slightly different. So, it pays to do a good bit of research before making a final decision.
Make sure to consider every aspect of your business, the types of risks your shop faces (or could face) and consider your operating budget to determine how much you can afford to pay for a shop insurance premium.
With this information in hand, you’ll be ready to look for the right insurance policy and premium for your particular circumstances.
Am I Legally Required to Have Shop Insurance?
No, the law does not require that you buy shop insurance for your retail business. However, as noted earlier, if you’re hit by accidents, natural events, or legal actions from customers, you could easily lose your business and more. Shop insurance is a great way to protect your customers, you and your business from these types of threats.
However, if you have employees, then you are legally required to have employee’s liability insurance. This coverage protects you from claims filed by your staff if they become injured or sick while working in your shop.
What Does Shop Insurance Cover?
Shop insurance is a flexible type of business insurance, which makes it easier to find the right policy and premium to fit your specific retail business.
Most insurance providers include these types of coverage under their shop insurance policies:
- Public liability insurance: while not a legal requirement, public liability insurance protects you from third parties who are injured, or their property damaged while in your shop. This insurance covers all claims from a customer, including the cost of compensation and legal expenses.
- Product liability insurance: if a product you create causes illness or injury, this insurance protects you from claims and legal expenses. For instance, if you run a bakery or a butcher shop, and a customer isn’t happy with the goods or they get sick from the product, then they could file a legal claim. Product liability insurance covers this possible scenario.
- Stock & contents insurance: some insurance providers put these stock and contents together in one, or you may find these as separate types of insurance.
- Stock insurance protects the stock you have on the shop’s premises. It protects against theft, damage from flooding or fires, etc. Stock insurance only protects your stock up to a certain amount. When shopping for a policy, make sure the level of protection covers the value of your stock. Also check to see if there’s an option to increase the stock value for those seasonal times of the year, such as Christmas, when you have more stock on the premises.
- Business contents insurance covers the entire interior of your shop, including fixtures and fittings. Here, again, it’s important to check the policy to see if it also covers business equipment and shop furnishings. If not, then you may have to buy an add-on to cover these articles.
- Online shop insurance: covers many of the same aspects as shop insurance for a real store. However, if you run a home-based business, then first check to see if your homeowner’s policy offers your business protection.
What are the Add-Ons to Consider with Shop Insurance?
Remember that each shopkeeper insurance policy will be slightly different in what it covers. The add-ons offered will also vary by insurance provider. Here are insurance add-ons to consider for your business:
- Terrorism insurance: protects your shop in the event it’s damaged by a terror attack.
- Business interruption insurance: remember the flood example we explored earlier? If your shop is closed due to damage from a flood, this is the insurance coverage that will cover your loss of income during this period. Or it can also work if you become ill and need to shut your shop for a time. All the costs of business operations, including rent, utilities, employee salaries may be included. However, this various from insurer to insurer.
- Buildings insurance: if you own your shop, this coverage protects your building and premises. However, if you rent your shop space, then your landlord’s buildings insurance is supposed to step in and cover damages, etc.
- Professional indemnity insurance: if you offer advice or expertise in your shop, this type of coverage protects you against a customer or client who doesn’t like your advice or believes you’ve somehow been negligent.
Does Shopkeeper Insurance Protect Against Employee Theft?
Yes, some insurance providers also include this as an add-on you can purchase to go with your base policy. It protects you against losses from fraud, dishonesty or theft from employees.
How to Get the Best Premium on Shop Insurance?
First, as noted earlier, make sure you have all the details of your business ready. Insurance agents and/or webforms will generally ask a number of questions to help determine the type and amount of coverage you require. In addition, the information you provide will also help them determine how much of a risk your business could be and bases the premium on this risk.
Once all the information is compiled, here’s how to save money on your premiums:
1). Comparison shop: use an online insurance comparison website to quickly search for insurance providers who specialize in shop insurance.
2). Go with a higher excess: choose to go with a higher voluntary excess for those instances when you may need to make a claim. The insurance policy will pay up to a particular amount, and then you’ll be required to pay the rest out of pocket. Be aware that this can be a risky choice if you’re not financially able to pay the excess.
3). Buy the policy online: many insurance companies offer discounts for buying your policy online, directly from their website. Even so, it’s still the best idea to call and talk with an agent before making your purchase. You want to make sure you by the right type and level of coverage for your business.
4). Choose to pay annually: annual premiums can be challenging to pay upfront; however, they’re usually cheaper than paying monthly.
Shop insurance is an excellent way to protect your retail shop from the types of risks you face each day. It’s a great investment that could save your and your livelihood when that unexpected event occurs.
Useful links - Insurance Associations
ABI – Association of British Insurers – The Association of British Insurers is the leading trade association for insurers and providers of long term savings. … need to contact their insurer for a Green Card which they will need to carry on them if they wish to drive their vehicle in the EU.
BIBA – British Insurance Brokers’ Association – The British Insurance Brokers’ Association (BIBA) is the UK ‘s leading general insurance organisation.
Employers Liability Insurance
Professional Indemnity Insurance
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