Retail Stores Insurance FAQ

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Get answers to small business insurance frequently questions including costs, coverages, minimum requirements, certificates & more.

Types Of Small Business Insurance

  • Includes medical payments, legal representation, and defense against libel and slander accusations.
  • Provides financial protection if an employee has a job-related accident or illness.
  • Bundles general liability insurance and commercial property into one affordable policy.
  • Pays to repair or replace your business property if it's stolen, damaged, or destroyed in a fire or natural disaster.
  • Covers mistakes or alleged mistakes on your part (errors) & failures or alleged failures to perform a service (omissions).
  • Is liability and physical damage protection for vehicles, such as cars, trucks and vans, that are used for business.
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Frequently Asked Questions About Small Business Insurance


What types of business insurance do I need?

Almost every business needs general liability and commercial property insurance at the very least. If you have any non-owner employees, you'll most likely need workers compensation insurance too as most state require it. Other types to consider are: commercial auto, professional liability, cyber liability, inland marine and others. It all depends on the risks your business faces. Read more...

How much does general liability insurance cost?

In 2019, commercial general liability costs can vary widely based on industry. Premiums are also determined by zip code and often payroll and/or gross sales. You can request a free quote to get an exact premium for your business. Read more...

How does general liability insurance work?

Having general liability is the basis of any business insurance program. If you can afford only one commercial insurance policy for your small business - then you should get a commercial general liability policy, because it offers protection against a wide range of unexpected risks, and will form the foundation of your business financial protection. Read more...

What is a Certificate of Insurance?

A Certificate of Insurance (COI) is proof of coverage. It verifies that you have insurance coverage for your small business, & contains information on types and limits of coverage, insurance company, policy number, named insured, and the effective date of the policy. Read more...
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Retail Stores Insurance FAQ Information

Retail Stores Insurance FAQ

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
  • Appliance
  • Army and Navy Surplus
  • Art Dealers
  • Athletic Goods
  • Audio-Video Equipment
  • Automobile Accessories
  • Bicycles
  • Booksellers
  • Camera Dealers
  • CD
  • DVD and Video Sales and Rentals
  • Cell Phone and Other Personal Communication Devices
  • Cigar
  • Clothing
  • Computer
  • Consignment
  • Cosmetic
  • Costumes
  • Craft
  • Department
  • Drug
  • E-cigarettes
  • Electrical Appliance
  • Embroidery Shops
  • Flea Market
  • Florists
  • Furniture
  • Furriers
  • Garden Shops
  • General Merchandise
  • Gift Shops
  • Glassware
  • Greeting Cards
  • Hair Goods
  • Hardware
  • Harness and Saddle Shops
  • Home Furnishings
  • Infants' and Children's Clothing
  • Jewelers
  • Lamp
  • Leather Goods
  • Lingerie
  • Linoleum and Tile
  • Luggage Dealers
  • Lumber Yards
  • Medical Supplies
  • Men's Furnishings
  • Milliners
  • Musical Instrument Dealers
  • News Dealers
  • Notions
  • Novelties
  • Office Furniture
  • Office Supply
  • Paint Dealers
  • Pawn Shops
  • Pet
  • Photo Supplies
  • Refrigerator Dealers
  • Rent-To-Own
  • Rug and Carpeting
  • Secondhand
  • Seed
  • Ship Chandlers
  • Shoe
  • Shopping Centers
  • Sporting Goods
  • Stationers
  • Tobacco
  • Toy
  • Trophy Shops
  • Tuxedo/Formal Wear
  • Variety
  • 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.

Types Of Retail Stores Insurance Policies

Following are some suggested commercial policies and coverages applicable for retails shops:

PACKAGE POLICIES

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)
PROPERTY COVERAGES

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:

  • Building
  • Business Personal Property
  • Personal Property of Others
  • Improvements and Betterments
INLAND MARINE 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:

  • 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
CRIME 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:

  • 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
SURETY 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:

  • Contract-Performance of Service or Supply Bonds
  • Court Bonds
  • Fiduciary Bonds
  • License and Permit Bonds
  • Miscellaneous Surety Bonds
COMMERCIAL LIABILITY 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:

  • Commercial General Liability (CGL) Coverage
  • Employee Benefits Liability Coverage
  • Employment-Related Practices Coverage
  • Owners and Contractors Protective (OCP) Liability Coverage
  • Special Events Liability Coverage
COMMERCIAL AUTO 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:

  • Auto Medical Payments
  • Business Auto Coverage
  • Collision Coverage
  • Comprehensive Coverage
  • Garagekeepers Coverage
  • Hired & Non-owned Auto Coverage (HNOA)
  • Uninsured/Underinsured Motorists Coverage
WORKERS COMPENSATION 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:

  • Stop-Gap or Employers Liability Coverage
  • Workers Compensation and Employers Liability Coverage
EXCESS AND UMBRELLA 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:

  • Excess Liability Coverage
  • Umbrella Coverage
AVIATION 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:

  • Aircraft Liability Coverage
  • Aircraft Passenger Liability Coverage
  • Aircraft Physical Damage (Hull) Coverage
OCEAN MARINE 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:

  • Ocean Marine Cargo Coverage
  • Ocean Cargo War Risk Coverage
SPECIALTY 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:

  • 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:

Retail Stores Insurance FAQ
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