Maybe a customer slips and falls in your store. Or you have an employee that’s been skimming some cash. These are examples of the many risks retail businesses unfortunately face. Learn how to protect yourself with retail insurance.
Best Retail Insurance
It’s best to get multiple quotes to find the best business insurance for retail. With Benzinga, you can get a custom quote by just entering your ZIP code. Here are our picks for the best retail insurance providers.
How Retail Insurance Works
Retail insurance isn’t a single type of insurance. Instead, it’s a combination of policies that address the risks specific to your business. A business that sells power tools and lumber will have different risks than an upscale clothing shop.
Some types of insurance, like general liability and commercial property insurance, are a good idea for all businesses. Many insurance providers offer discounts for buying multiple policies. An experienced agent or provider can help you determine which type of insurance your retail business needs.
Types of Retail Insurance
Here are the types of insurance a retail business should consider.
General Liability Insurance
General liability insurance protects your retail business from a range of claims, including:
- Bodily injury: Even if you take every possible precaution, there’s still a chance a customer could be injured on your store property. This coverage helps you pay for legal costs associated with these claims and medical payments for anyone injured. This insurance only covers customers and others who aren’t employed by your business who are injured. Employee injuries are covered under workers’ compensation insurance.
- Property damage: This provides coverage if someone’s property is damaged. While that might sound unlikely, let’s say an employee has a beverage they spill. They accidentally soil that beverage on a customer’s designer purse, damaging the purse and its contents. Property damage helps cover those claims.
- Personal and advertising injury: This is coverage from libel, slander and false advertising. While most wouldn’t intentionally engage in these practices, something as simple as an employee bad-mouthing a competitor to a customer could lead to a claim. It’s best to have this protection in place.
Commercial Property Insurance
Commercial property insurance protects your business if it’s damaged or destroyed. It also covers the contents of your business, including inventory, furniture and fixtures. Policies typically cover losses due to fire, hail, vehicles, theft, riots and vandalism. They don’t usually cover flooding or earthquakes, so if you’re concerned about those perils, it’s best to purchase additional coverage.
Business Interruption Insurance
If your business property is damaged, it affects more than your physical property. You might need to shut down or operate at a reduced capacity for days or weeks until repairs are completed. Business interruption insurance helps by making up lost income, making mortgage, lease or rent payments on your behalf, making loan and tax payments and helping you make payroll.
Review the policy’s terms carefully, as some only have a 30-day restoration period. You can extend it by paying more in premiums, which could be a good idea considering how long it can take for repairs to be completed.
Business Owner’s Policy
A business owners policy (BOP) bundles general liability, commercial property and business interruption insurance into one policy. Buying a BOP is less expensive than buying each policy separately.
A BOP is typically a good fit for small- or medium-sized businesses. If you think you might need an unusually high level of coverage or that your business has unique risks that may not be addressed, talk with potential insurers about whether a BOP or separate policies would be a better fit for your retail business.
Commercial Auto Insurance
If you use vehicles for any aspect of your business, like delivering to customers or moving inventory from storage into your retail space, consider commercial auto insurance.
Commercial auto insurance is similar to personal auto coverage. You can tailor the coverage to your needs and your budget. You’ll need to purchase at least the required minimum coverage in your state. States typically require liability coverage, and they may also require uninsured/underinsured motorist coverage and/or medical payment coverage.
Liability covers the repairs to vehicles owned by others in an accident. Uninsured/underinsured covers the accident if the other driver is underinsured, uninsured or flees the scene. Medical payment coverage pays for medical care for the driver of your business vehicle and any passengers.
You could also opt for collision and comprehensive coverage. Collision covers damage to your business vehicle if it’s involved in an accident and your driver is at fault. If the other driver is at fault, the damage is typically covered by their insurance. Comprehensive covers damage that’s not from a collision with another vehicle. This includes flood, theft, vandalism, fire and falling objects.
Commercial Umbrella Insurance
Policies have limits when it comes to how much they’ll pay per incident, policy period or both. Commercial umbrella insurance starts paying when another policy hits its limits. For example, if your driver is found to be at-fault in an accident and the driver of the other vehicle can no longer work due to injuries, it could exhaust your liability coverage. Your umbrella insurance would pay the balance of any damages awarded up to your policy limits.
This policy is typically purchased by the same insurer you have your other policies with. There may be policy minimums you need to meet before you can buy umbrella coverage.
Data Breach/Cybersecurity Insurance
Small businesses are an increasingly popular target for cybercriminals. They tend to have lower cybersecurity defenses. Cybercriminals target information of value, like customer names, addresses and even payment methods. Cybersecurity insurance helps your business recover if there’s a data breach or business interruption due to a cyberattack.
Employment Practices Liability Insurance
Retail businesses tend to employ a lot of people. There’s a lot of turnover, and you’re sometimes put in the position of terminating someone’s employment. Employment practices liability insurance helps to cover your defense if you’re sued by an employee for discrimination, wrongful termination, failure to promote, wrongful discipline and other issues related to employment. Sometimes this insurance is added to BOPs, while other times it’s a standalone policy. Potential insurers can advise you on available options.
Business Crime Insurance
While commercial property insurance typically covers theft from outside parties, it typically doesn’t cover employee theft. Business crime insurance helps cover you from losses due to employee theft, safe burglary and embezzlement.
Workers’ Compensation Insurance
Every state except Texas requires workers’ compensation for some or all businesses with employees. Some states have exceptions for very small businesses. Even if it’s not a requirement, workers’ compensation is good coverage to have. It helps your employees by covering medical costs associated with any work-related illnesses or injuries.
It also helps cover lost wages for employees who can’t return to work right away. Some policies also cover job rehabilitation if employees can’t work in the same position as before.
If you have workers’ compensation, in most cases employees can’t sue over work-related illnesses or injuries. If you don’t have workers’ compensation insurance, you could be violating state law and employees could sue you over injuries or illnesses.
Cost of Retail Insurance
The cost of retail insurance is influenced by:
- The size of your business
- The number of employees
- The size of your payroll
- Your claims history
Here are the average costs of several types of retail insurance.
|Policy||Annual Premium||Coverage Limit|
|General Liability Insurance||$350||$2 million|
|Commercial Property Insurance||$755||$60,000|
|Business Income Insurance||$500-$1,500||Based on business income|
|Business Owner’s Policy||$800-$2,000||$1 million per occurrence/$2 million per policy term|
|Commercial Auto Insurance||$1,700||$1 million|
|Commercial Umbrella||$500-$1,500||$1 million|
|Employment Practices Liability Insurance||$800-$2,000||$500,000 per occurrence/$1 million per policy term|
|Business Crime Insurance||$600-$750||$500,000|
|Cybersecurity/Data Breach||$1,500||$1 million|
Which Retail Insurance Is Right for You?
Every retail business has unique needs. The best way to find the right coverage is to contact multiple insurance providers. Benzinga makes it easy, and you can get a quote by entering your ZIP code. Review the policy details and the premiums, choosing a provider with a stellar reputation and competitive premiums.