Best Insurance for Convenience Stores

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Contributor, Benzinga
September 9, 2020

With over 150,000 stores across the nation, the local convenience store has become a staple in modern America. From a quick fuel fill-up to a fast bite to eat on a lunch break, convenience stores offer a faster way to get what you need and get on with the day. 

If you're a convenience store owner, having the right insurance coverage is key. Which types of coverage you’ll need often depends on what your store sells. Here’s what you should know before choosing the best convenience store insurance. Yes, you can speak with insurance agents, but you need to go into the process as informed as possible.

Best Convenience Store Insurance

Compare quotes from multiple providers to find the best rates for convenience store insurance. You can also customize your coverage to suit the specific need of your convenience store business. 

For example, the National Association of Convenience Stores (NACS) reports that about 80% of convenience stores sell fuel. Stores that sell fuel need coverage for the tanks, as well as the pumps, canopies, and other equipment. Check out the table below to get started.

Types of Convenience Store Insurance

It’s often wiser to buy a package rather than a standalone policy or multiple policies from multiple providers. With a customized insurance package, you can often save money by purchasing multiple policy types through the same insurer. Insurers call this bundling. 

You’ll also benefit from purchasing policies built to work together, often eliminating troubling gaps that can plague mix-and-match policies from multiple providers. Consider these common coverage types when shopping for convenience store insurance.

Commercial General Liability Insurance

Your general liability insurance is the core coverage for your convenience store insurance package and protects against common 3rd-party risks like slip and fall accidents. With hundreds or even thousands of customers coming through your store each day, the risks are high. Base coverage amounts begin at $1,000,000. Higher limits are available through most insurers.

Commercial general liability insurance also protects your business against claims due to slander, libel or advertising injury. However, commercial liability coverage only protects against certain types of liability. If you have employees, for example, consider a workers’ compensation insurance policy as well to help protect against work-injury liability.

Commercial Property Insurance

Commercial property insurance shields your convenience store business against a wide range of risks including the more destructive side of nature like wind, hail or snow. Your policy also protects against fire damage and lightning as well as human risks such as vandalism and theft. 

A commercial property insurance policy covers the building itself, but also protects your inventory, supplies and equipment.

With many insurers, you can purchase commercial general liability insurance combined with commercial property insurance coverage in 1 policy called a business owners’ policy (BOP). This structure combines 2 key coverage types in one easy-to-manage policy.

Business Interruption Coverage

If your business suffers lost income due to a covered commercial property insurance claim, business interruption coverage can help pay for standard operating expenses while your business is being repaired. 

Workers Compensation

In most states, workers’ compensation coverage is required by law. However, this coverage often makes a wise choice even when not required. Workers’ comp provides no-fault coverage for work-related injuries to employees but can also protect the business against many work-injury related lawsuits.

Commercial Auto Insurance

If your business owns vehicles, a commercial auto insurance policy can cover business auto risks and provides higher liability insurance limits than personal auto policies offer. For mixed-use vehicles that include both personal and business use, discuss your coverage needs with your broker or agent. Personal auto policies don’t cover business use, but a policy add-on can address some use types.

Specialty Coverages For Convenience Stores 

The key to effective coverage for your convenience store is customization. Many businesses are similar, but each faces a unique combination of risks that may require specialized coverage. 

Below are some of the coverages you might wish to add to your policy:

  • Employment practices liability insurance
  • Liquor liability coverage
  • Environmental liability insurance
  • Sign coverage
  • Cyber liability insurance
  • Garagekeepers liability insurance
  • Equipment breakdown coverage
  • Umbrella insurance or excess liability insurance
  • Crime coverage
  • Employee dishonesty coverage

Cost of Convenience Store Insurance

Business insurance rates for convenience stores are a reflection of risk. Longer hours and cash on hand  in the convenience store industry itself invite more crime than seen in many other business types. Expect to pay a bit more based on crime risk, but other factors can play a role in rates as well. 

Insurers also consider prior losses as a possible indicator of future losses. Many insurance companies require your loss history for the past 3 years, also called a loss run. Prior claims of any type can drive insurance costs north, as can gaps in coverage, meaning periods during which your business was uninsured. 

The method for calculating the cost of insurance for convenience stores also varies based on insurance type. Workers’ comp rates vary by payroll costs, while commercial liability coverage cost varies based on top-line revenue. 

All these moving parts make it difficult to predict a cost for coverage because the profile for each business is different. Here are some examples of typical costs for lower risk businesses.

Policy typeAnnual costCoverage limit
General liability insurance$750$1,000,000 (minimum)
Commercial property insurance$500Replacement cost
Business owners’ policy$1000 to $1250 Varies
Workers’ compensation$1,000Varies
Liquor liability$550Varies

Depending on your business, you may not need all these coverage types or you might need some coverage types not listed in the table. And costs compete with profits in business but insurance is an area where you don’t want to make a decision based on price alone. Details matter when choosing coverage options and limits. You’ll want to be sure your business is well protected.

Remember, insurance deductibles should change depending on the policy, but any policy still gives you the peace of mind you need. The insurance industry can be complicated, and this sort of coverage isn’t the same as health insurance or homeowners insurance. Review all your options before blindly purchasing a policy.

How Convenience Store Insurance Works

Rather than being a single policy, convenience store insurance often includes 2 or more business insurance policies that address the specific risks of convenience stores. For example, about 80% of convenience stores sell fuel. A standard business liability policy doesn’t cover the risks associated with selling fuel and maintaining fuel tanks, but a convenience store insurance package can be customized to cover this risk and other risks unique to your business.

A business owners’ policy (BOP) offers a common solution because this policy type combines both general liability insurance and business property insurance. You can also add coverages to your policy or extend your coverage limits through additional policies like an umbrella policy or excess liability policy.

Insurance is the transfer of risk. In exchange for a monthly or annual premium, which is the money you pay for your coverage, your policy protects you against potential risks that can far exceed the amount you pay in premiums. For example, liability limits often start at $1 million, although most businesses won’t pay this much in premiums over the life of the business.

Many coverage types also use a deductible. The deductible is the part of the claim that you pay and having a deductible helps keep insurance rates more affordable for everyone by inhibiting smaller claims. Much as with your business itself, you’ve got some skin in the game. However, you can often adjust your deductibles to match your risk tolerance. A higher deductible often leads to lower rates because your business assumes more risk.

Insurers may offer preferred rates for a clean claims history and discounts for safety measures are common. Ask your insurer which additional discounts are available for your business. Also, consider consolidating your policies with one insurer if possible. 

Many insurers offer discounts for buying more than one type of coverage from the same provider. But savings aren’t the only reason to consider bundling. Different policy types from the same insurer often fit together well and eliminate gaps that can create risk.

Choosing the Best Convenience Store Insurance

On an individual business level, liability risks and risks to your business property can be difficult to predict which makes choosing the right coverage essential. Insurance coverage limits that are too low or coverage that overlooks potentially large exposures can put the future of your business at stake. 

When choosing the best convenience store insurance, price is an important consideration, but more complete coverage makes a better focus — even if it costs a bit more. Compare rates and weigh coverage features to find the best business insurance policy today.