Retail Stores Insurance FAQ Information
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.
What Is A Retail Store?
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:
- Antique Dealers
- Army and Navy Surplus
- Art Dealers
- Athletic Goods
- Audio-Video Equipment
- Automobile Accessories
- Camera Dealers
- DVD and Video Sales and Rentals
- Cell Phone and Other Personal Communication Devices
- Electrical Appliance
- Embroidery Shops
- Flea Market
- Garden Shops
- General Merchandise
- Gift Shops
- Greeting Cards
- Hair Goods
- Harness and Saddle Shops
- Home Furnishings
- Infants' and Children's Clothing
- Leather Goods
- Linoleum and Tile
- Luggage Dealers
- Lumber Yards
- Medical Supplies
- Men's Furnishings
- Musical Instrument Dealers
- News Dealers
- Office Furniture
- Office Supply
- Paint Dealers
- Pawn Shops
- Photo Supplies
- Refrigerator Dealers
- Rug and Carpeting
- Ship Chandlers
- Shopping Centers
- Sporting Goods
- Trophy Shops
- Tuxedo/Formal Wear
- Vending Machine Operators
- Women's Apparel
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.
What Kinds Of Insurance Do Retail Stores Need?
- At the minimum, retail stores need general liability insurance.
- If they have employees they will need workers compensation in most states.
- If they have vehicles registered to the business, or use vehicles for the business purposes, they will also need commercial auto.
- There are also other specialty coverages and endorsements that might be needed based on their operations.
Following are some suggested commercial policies and coverages applicable for retailers:
You can skip to the following types of retail stores small business insurance policy coverage types using these links:
Retail Stores Commercial Insurance Policies:
- What kinds of commercial package policies do retail stores need?
- What kinds of commercial property insurance do retail stores need?
- What kinds of inland marine insurance do retail stores need?
- What kinds of crime insurance do retail stores need?
- What kinds of surety coverage do retail stores need?
- What kinds of commercial liability insurance do retail stores need?
- What kinds of commercial auto insurance do retail stores need?
- What kinds of workers compensation insurance do retail stores need?
- What kinds of excess and umbrella insurance do retail stores need?
- What kinds of specialty insurance do retail stores need?
What Kinds Of Commercial Package Policies Do Retail Stores Need?
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:
- Businessowners Policy (BOP)
- Commercial Package Policy (CPP)
What Kinds Of Commercial Property Insurance Do Retail Stores Need?
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:
- Business Personal Property
- Personal Property of Others
- Improvements and Betterments
What Kinds Of Inland Marine Insurance Do Retail Stores Need?
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:
- Accounts Receivable Coverage
- Bailee Customers Coverage
- Camera and Musical Instrument Dealers Coverage
- Commercial Articles Floaters
- Contractors' Equipment Coverage
- Difference in Conditions (DIC) Coverage
- Electronic Data Processing Equipment Coverage
- Equipment Dealers Coverage
- Fine Arts Coverage
- Fine Arts Dealers Coverage
- Floor Plan Coverage
- Furriers Block Policy
- Furriers Customers Coverage
- Furriers Customers Excess Legal Liability Coverage
- Goods In Transit
- Installation Coverage
- Installment Sales Coverage
- Jewelers Block Policy
- Processing Risk Coverage
- Scheduled Property Coverage
- Signs Coverage
- Transportation Coverage
- Valuable Papers and Records Coverage
What Kinds Of Crime Insurance Do Retail Stores Need?
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:
- Computer and Funds Transfer Fraud Coverage
- Employee Theft Coverage
- Forgery or Alteration Coverage
- Inside The Premises-Theft of Money and Securities Coverage
- Inside The Premises-Robbery or Safe Burglary of Other Property Coverage
- Money Orders and Counterfeit Money Coverage
- Outside The Premises Coverage
What Kinds Of Surety Coverage Do Retail Stores Need?
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:
- Contract-Performance of Service or Supply Bonds
- Court Bonds
- Fiduciary Bonds
- License and Permit Bonds
- Miscellaneous Surety Bonds
What Kinds Of Commercial Liability Insurance Do Retail Stores Need?
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:
- Commercial General Liability (CGL) Coverage
- Employee Benefits Liability Coverage
- Employment-Related Practices Coverage
- Owners and Contractors Protective (OCP) Liability Coverage
- Special Events Liability Coverage
What Kinds Of Commercial Auto Insurance Do Retail Stores Need?
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:
- Auto Medical Payments
- Business Auto Coverage
- Collision Coverage
- Comprehensive Coverage
- Garagekeepers Coverage
- Hired & Non-owned Auto Coverage (HNOA)
- Uninsured/Underinsured Motorists Coverage
What Kinds Of Workers Compensation Insurance Do Retail Stores Need?
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:
- Stop-Gap or Employers Liability Coverage
- Workers Compensation and Employers Liability Coverage
What Kinds Of Excess And Umberlla Insurance Do Retail Stores Need?
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:
- Excess Liability Coverage
- Umbrella Coverage
What Kinds Of Specialty Insurance Do Retail Stores Need?
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:
- American Expatriate Coverage
- Business Legal Expense Coverage
- Cyber Liability Coverage
- Data Security Breach Coverage
- Directors and Officers Liability Coverage
- Electronic Data Liability
- Environmental Impairment Liability Coverage
- Export Credit Insurance Coverage
- Fiduciary Liability (Pension, Welfare and Employee Benefit Funds) Coverage
- Identity Theft Insurance Coverage
- International Insurance Coverage
- Risk Retention Group Liability Coverage
- Solar Energy System Coverage
- Tax Liability Coverage
- Tender Offer Defense Expense Coverage
- Terrorism Insurance Coverage
- Unmanned Aerial Vehicles (UAV) (Drones)
- Weather Coverage
Retail Stores Insurance FAQ - The Bottom Line
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.
Frequently Asked Questions By Industry
Learn about the coverages available for specific industires with the Insurance FAQs below:
- Artisan Contractors
- Automotive Sales and Service
- Aviation Risks
- Boats and Yachts
- Construction Contractors
- Eating and Drinking Establishments
- Educational Institutions
- Farm and Ranch
- Financial Institutions
- Food Processing Plants
- General Liability
- Government, Institutions and Utilities
- Health Care Providers
- Lodging Places
- Logging, Mining and Quarries
- Printing Services
- Real Estate and Rental Property
- Recreation and Sports
- Retail Food and Beverage
- Retail Stores
- Services Businesses
- Trucking and Transit
- Warehouses and Storage
- Wholesalers and Distributors