Retail Stores Insurance FAQ. Retail stores are susceptible to premises liability claims because of customer traffic, but large department and specialty stores are more susceptible than most.
All retail stores have significant property exposures. The on-hand stock represents a considerable investment, but the amount on hand fluctuates seasonally. For this reason, physical damage insurance on this property must be arranged carefully.
When the insured occupies a non-owned building, insurance coverage must be arranged for the insured's interest in extensive improvements and betterments made to the premises. Crime insurance, in the form of employee theft and money and securities coverage, is also very important.
We wanted to provide a deeper dive into small business insurance to help our readers get a better understand of the commercial insurance policies they want and need with the Retail Stores Insurance FAQ.
Read the Retail Stores Insurance FAQ to learn what type of commercial insurance coverages are right for your shop - including liability, property, workers compensation and other specialty policies.
According to Webster's Dictionary, a retail store is, "a place of business usually owned and operated by a retailer but sometimes owned and operated by a manufacturer or by someone other than a retailer in which merchandise is sold primarily to ultimate consumers."
Retail Stores include - but are not limited to - the following types of businesses:
You can reference the Insurance Definitions, Dictionary And Glossary to better understand the commercial insurance policy terms and language used in our Small Business Insurance FAQs.
Following are some suggested commercial policies and coverages applicable for retails shops:
The businessowners policy was designed with retail exposures and operations in mind. For this reason alone, it should always be the first type of package coverage to consider. However, for those risks not eligible for the businessowners program, the commercial package policy (CPP) is a practical and convenient way to combine a number of coverages into one policy.
Types Of Retail Stores Package Policies:
Inventory or stock is the major property exposure for most retail operations. Because stock values tend to fluctuate or have significant peaks at certain times of the year, value reporting or peak season valuation options should be considered.
Business income coverage, including business income from dependent and secondary dependent properties coverage, may mean the difference between a retail operation staying in business or being forced into bankruptcy following a loss.
Types Of Property Coverages:
Inland marine coverage options should be carefully considered when evaluating the insurance needs for a particular retail business. A business personal property inventory should be prepared to uncover gaps that can be filled only with one or more of the following:
Types Of Inland Marine Coverages:
Most retail businesses offer endless opportunities for a variety of criminal activities. For this reason, the coverages needed must be carefully evaluated.
Holdup and robbery losses may be the most obvious concerns but employee theft, fraud and counterfeit money losses are also serious issues that cannot be dismissed. Finally, high-end retail businesses may be targets for extortionists or kidnap and ransom capers.
Fraudulent Impersonation coverage is a newly introduced coverage that can aid for loss due to trickery.
Other coverages that may be needed are determined by money-handling arrangements, the nature and extent of computer transactions and functions, and whether or not the business is considered a target. Fraudulent impersonation coverage could be very helpful to certain service operations because it covers loss through trickery.
Types Of Crime Coverages:
Retailers may need surety bonds because of types of contracts they make and/or the licenses and permits required of them to operate at their particular location. Bonds will be required to guarantee that the business will keep its promise and conduct operations in the prescribed manner.
Types Of Surety Coverages:
Retail businesses generate income through interaction with customers. This interaction is also how a customer can sustain an injury and then sue the retailer for damages.
Hazards, exposures and operations both on premises and off are important and must be covered, but liability the retailer may incur because of the merchandise sold must also be considered and insurance protection arranged.
Types Of Liability Coverages:
The automobile exposures of a retail business may be limited to hired and non-owned automobiles only. On the other hand, they can be extensive if the retailer picks up or delivers merchandise. Garagekeepers coverage may be necessary if valet parking is provided.
Types Of Business Auto Coverages:
Injuries to employees as a result of attempted or actual holdups or robberies are a concern, but other day-to-day activities like lifting, slips and falls can also cause serious injuries and must also be considered. Workers compensation provides the coverage for the employee injuries.
Types Of Workers Comp Coverages:
Professional liability coverage should be included with the other underlying general liability, automobile liability and employers liability coverages under an excess or umbrella liability policy whenever possible.
All underlying exposures, hazards and operations must be evaluated thoroughly and carefully to determine the liability limits needed to adequately protect the financial assets of the insured.
Types Of Excess Liability Coverages:
Retail operations with geographically separated locations may own or lease aircraft to more easily, comfortably and conveniently travel between all their stores.
Types Of Aviation Coverages:
A retail business that sells to international or overseas customers may need an ocean marine cargo policy to cover the merchandise in transit to those customers. If the customers are located in or near a war risk zone, a separate ocean cargo war risk policy may also be required for full insurance protection.
Types Of Ocean Marine Coverages:
Retail businesses are gaining greater exposure to international issues because of the growth in sales via the internet. As these sales increase, the added exposures faced by these retailers must be evaluated. While their operating horizons are expanding so are their potential loss exposures. One of the following coverages may cover some of those growing coverage gaps.
Types Of Specialty Coverages:
There are many commercial insurance policies available for Retail Stores. To find out what types of coverage your business needs, speak to a professional insurance broker with experience in insuring retail businesses.
Learn about the coverages available for specific industires with the Insurance FAQs below: