Grocery Store Insurance Policy Information
Grocery Store Insurance. Grocery stores sell a variety of foodstuffs, which can be baked, bottled, canned, fresh, or frozen. Items can be prepackaged or bulk. Some produce baked goods while others prepare salads, rotisserie chickens, or heat-and-eat meals. There may be a butcher department for fresh fish or meat cutting or a delicatessen.
Many grocery stores sell an assortment of nonfood items such as auto maintenance items, books and magazines, clothing, cooking utensils, flowers, greeting cards, household cleaning items, kitchenware, light hardware or tools, liquor products (where permitted), lottery tickets, novelties, over-the-counter medications, personal care products, pet supplies, seasonal decorations, or tobacco.
Services offered may include branch banks, gasoline or fuel sales, hair or nail salons, pharmacy, shoe repair, U.S. Post Office or Western Union substations, or video rentals. In some areas, the grocery store may be open 24 hours a day, seven days a week.
Given the demands of your business and the fact that you are working with the public and multiple vendors, having grocery store insurance coverage that is customized to meet your unique needs is important. With the right policies, you can protect yourself from the many risks that are associated with operating a grocery store, from spills and broken glass, to theft and property damage - and more.
Grocery store insurance protects your shop from lawsuits with rates as low as $47/mo. Get a fast quote and your certificate of insurance now.
How Much Does Grocery Store Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small srocery stores ranges from $47 to $79 per month based on location, size, payroll, sales and experience.
Why Is Insurance Important For Groceries?
Operating a grocery store in is an expensive proposition. It's also a demanding one. You work directly with the public. If any accidents occur on your business property, you are liable for the damages. You also employ a staff, which may be quite large. Should your employees suffer an injury, you are also responsible for their medical needs. The same is true for any vendors that you work with; if they are injured on your property, you are legally responsible.
Aside from accidents and injuries, there's also the risk of theft and property damage. If someone steals a large sum of your inventory or if your grocery store is damaged in a storm, you could suffer extensive losses.
Grocery store insurance is designed to protect you from most of the risks that are associated with running a grocery store. For example, if a patron slips and falls on wet floors, if an employee suffers an injury while using a meat slicing machine, or if your property is vandalized or robbed, insurance will help to off-set the costs. In other words, with the right insurance policy, you can avoid a devastating financial situation.
What Type Of Business Insurance Should Grocery Store Owners Have?
There are several Grocery store insurance policies that groceries should consider carrying. Some of the key types of coverage you should carry include:
- Commercial Property: With this type of commercial insurance, the physical structure of your store, as well as the contents inside, will be protected. For instance, a tree falls down on your store during a storm, someone steals products or equipment, or if the exterior walls are vandalized, a commercial property insurance policy will help to cover the losses. The items that are covered by your policy will vary, but typically, theft, fire, and vandalism will be covered.
- Commercial General Liability: With this type of coverage, you will be protected from any accidents or injuries that you are found legally responsible for. A commercial general liability policy will offer cover negligence claims. For instance, if a shelf falls over and injures a patron, and if that patron sues you on the grounds that you did not properly secure the shelf, your general liability policy will cover the cost of any necessary medical care, as well as legal fees.
- Business Interruption: In order to be successful, your store needs to be opened for business. But what happens if a situation occurs that forces you to close for an extended period of time? For example, what if there's a fire and you need to be closed until the store is rebuilt and considered safe to open to the public? You could lose a substantial amount of income. A business interruption policy can help to replace the lost income, including payroll for your employees.
- Workers Compensation: While liability insurance will cover third party accidents, injuries, and legal claims, it will not cover your employees. You need to have a workers comp policy to cover any accidents, injuries, or legal claims that are associated with your staff. For instance, if an employee suffers a serious injury while using a meat slicer and files a lawsuit claiming that the machine was not properly maintained, workers' compensation will cover the cost of medical care, will replace the employee's lost wages, and will cover legal fees.
Grocery Store Risks & Exposures
Premises liability exposure is very high due to public access to the premises. Slips, trips, and falls are major concerns, especially during inclement weather when customers track snow, mud, and water into the facility. All goods should be kept on easily reached shelves so that customers do not pull items down on themselves. Customers drop items in the produce area and may carry food and other items throughout the store, generating spills that can result in slips and falls.
Housekeeping should be excellent, and spills must be cleaned up promptly. Warning signs should be posted after mopping. Floor coverings must be in good condition, with no frayed or worn spots on carpet and no cracks or holes in flooring. Steps and uneven floor surfaces should be prominently marked. There should be well marked sufficient exits, with backup lighting systems in case of power failure. Parking lots and sidewalks need to be in good repair, with snow and ice removed, and generally level and free of exposure to slip and falls.
Customers can be injured or killed during a robbery. Security of visitors in parking areas is rapidly becoming the responsibility of the owner or operator of the premises. Outdoor security and lighting must be consistent with the area.
Products liability exposure is high due to the possibility of food poisoning, contamination, spoilage, foreign objects in the product, and allergic reactions. Monitoring the quality of food received, posting lists of ingredients, and maintaining proper storage temperature can reduce this exposure. Food processing areas must meet all FDA specifications for sanitary working conditions and be arranged to prevent foreign substances from entering the area.
There should be controls in place to prevent contamination from chemicals such as insecticides and pesticides used for pest control. The stock should be regularly rotated so older stock is sold first. Out of date stock must be removed on a regular basis and discarded. Accurate records must be kept of products and batches to monitor for recalls.
Liquor liability exposures are from selling liquor to underage individuals and those already intoxicated as there is no on-premises consumption of alcoholic beverages. Any failure to comply with state and federal regulations can result in the loss of a liquor permit. There must be a set procedure to check ages of anyone attempting to purchase alcohol. Employees must be trained to recognize signs of intoxication.
Workers compensation exposure is very high due to lifting heavy cartons and sides of meat that can cause back injury, hernias, sprains, and strains. Floors may become slick, resulting in slips and falls. Diseases may be transmitted from handling meat. Repetitive stress injuries such as carpal tunnel syndrome plague butchers, as do cuts and potential injury from saws, grinders, and other meat processing equipment, foreign objects in the eye, and hearing impairment from noise.
Cooking can result in burns. Anhydrous ammonia refrigerants are poisonous when leaked into confined spaces such as coolers. Controls must be in place to maintain, check, and prevent such injury. Cleaning workers can develop respiratory ailments or contact dermatitis from working with chemicals. Employees should be provided with safety equipment including guards on machinery, trained on proper handling techniques, and have conveying devices available to assist with heavy lifting. In any retail business, hold-ups are possible, so employees should be trained to respond in a prescribed manner.
Property exposures are very high from electrical wiring, processing equipment, cooking equipment, refrigeration units, and heating and air conditioning systems. The wiring must be current and up to code. Due to its combustibility, an ammonia detection system should be in place if ammonia is used as a refrigerant. If cooking is done on premises, all grills and deep fat fryers must have automatic fire extinguishing protection, hoods, and filters. There should be fuel shut-offs and adequate hand-held fire extinguishers.
The kitchen must be kept clean and grease free to prevent the spread of fire. Filters should be changed regularly. The storage and disposal of boxes, packaging, and wrappings can increase the fuel load for fire if not handled properly. If there are any on-premises incinerating devices to burn or dispose of combustible waste, the age, condition, maintenance, and controls are key. Spoilage exposure is very high if refrigeration equipment malfunctions or loses power. A small fire or a power outage of even moderate duration can cause all fresh and frozen goods to be condemned as unfit for consumption or sale. Alarms and warning devices should be in place to alert the operation to loss of power. Backup power, such as a generator, should be available.
Theft is a concern as some types and cuts of meat are high in value and easily fenced. Appropriate security measures should be in place, such as keeping more expensive meats behind glass and inaccessible to customers and having security mirrors prominently displayed throughout the store. Premises alarms should report to a central station or police department after hours.
Equipment breakdown exposures can be high as operations are dependent on refrigeration and cooking equipment.
Crime exposure can be severe for both employee dishonesty and theft of money and securities. Background checks should be conducted on all employees. The inventory must be under the supervision of more than one individual so that there are checks and balances. All orders, billing, and disbursements must be handled as separate duties. Regular audits must be conducted. If there is a 24-hour exposure or even late night/early morning hours, grocery stores can be a target for holdup.
Money should be regularly stripped from the cash drawers and irregular drops made to the bank during the day to prevent a substantial accumulation of cash on the premises.
Inland marine exposures include accounts receivables from billings to customers, computers for inventories and sales transactions, signs, and valuable papers and records for suppliers' and employees' information. Backup copies of all records, including computer records, should be made and stored off premises.
Commercial auto exposure may be limited to hired or non-owned liability exposures from employees running errands. If delivery services are provided, only company vehicles should be used. Drivers must have appropriate licenses and acceptable MVRs. Vehicles should be properly maintained, and records retained.
Commercial Insurance And Business Industry Classification
- SIC CODE: 5411 Grocery Stores
- NAICS CODE: 445110 Supermarkets and Other Grocery (except Convenience) Stores
- Suggested ISO General Liability Code(s): 13673
- Suggested Workers Compensation Code(s): 8033
Business Insurance For Groceries
To find out which type of business insurance you should carry - and how much coverage you should have - speak to a reputable insurance broker that specializes in business insurance for grocery store owners.
Small Business Economic Data & Insurance Regulations
Perhaps you have the next great idea for a product or service that you know will appeal to your local area. Maybe you want to contribute to the economic growth of your community. Whatever the reason is, if you're thinking about starting a small business, it's important to understand pertinent information relating to small businesses in the United States; namely economic information and insurance regulations. After all, if you want your small business to succeed, you have to understand the economic trends organizations of a similar size in your area.
Likewise, you want to ensure that your small business is well protected with the right business insurance and that you are in compliance with the rules and regulations that pertain to commercial insurance in your region.
Read up on economic statistics and insurance information that relates to small business owners in the United States.
Small Business Economic Data In The United States
Here's a look at some information that was compiled by the Small Business Association (SBA) regarding the economic data that pertains to small businesses in the United States:
- In 2015, small businesses in the United States employed an estimated 58.9 million American workers, or 47.5 percent of the nation's private workforce.
- Largest shares = fewer than 100 employees. The small businesses that employed 100 people or less had the largest share of employment amount small businesses.
- Employment increased by nearly 2 percent. In 2018, employment amongst small businesses increased by 1.8 percent, which is an increase of 1 percent from the prior year.
- Increase in proprietors. In 2016, the number of small business proprietors increased by 2.3 percent.
- In 2015, small businesses were responsible for creating 1.9 million net jobs. Organizations that employed 20 people or less had the largest gains, as they added an estimated 1.1 million net jobs.
- There were 5.7 million loans that were value less than $100,000 issued by lenders in the United States in 2016. These loans were issued under the Community Reinvestment Act.
- Small business owners that were self-employed at the incorporated businesses that they owned reported a median income of $50,347 in 2016.
- Small business owners that were self-employed at the unincorporated businesses that they owned reported a median income of $23,060 in 2016.
Small Business Insurance Information
In the business world, there are many risks faced by company's every day. The best way that business owners can protect themselves from these perils is by carrying the right insurance coverage.
The The National Association of Insurance Commissioners (NAIC) is the U.S. standard-setting and regulatory support organization. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer review, and coordinate their regulatory oversight.
Commercial insurance is particularly important for small business owners, as they stand to lose a lot more. Should a situation arise - a lawsuit, property damage, theft, etc. - small business owners could end up facing serious financial turmoil.
According to the SBA, having the right insurance plan in place can help you avoid major pitfalls. Your business insurance should offer coverage for all of your assets. It should also include liability and casual coverage. The SBA recommends the following insurance plans for small business owners:
- Commercial Property Insurance: In the case of an unplanned disaster - fire, flood, vandalism, theft, etc. - this type of coverage will help you avoid paying for the damage out of your own pocket. Even if you rent the property, you should still carry commercial property insurance.
- Commercial Liability Insurance: In the event that a legal situation arises - a negligence lawsuit, for example - commercial liability coverage will provide financial protection. It will cover the cost of legal defense fees, court fees, and even moneys that may be awarded.
- Commercial Auto Insurance: If you operate a vehicle for any activities that are related to your business - transporting and/or delivering goods, or meeting with clients - commercial auto insurance is legally required for businesses of all sizes, including small businesses.
Additional Resources For Food Service Insurance
Learn about restaurants, bars, liquor stores commercial insurance coverages. See how small business food service insurance help protect against accidents, oversights and lawsuits resulting from business operations.
- Bagel Shop
- Beer Distributor
- Coffee Shop
- Concession Stand
- Farmers Market
- Grocery Store
- Liquor Liability
- Liquor Store
- Liquor Wholesaler
Bars, taverns, restaurants, cafeterias, and other eating and drinking places have significant insurance needs in three separate areas.
The first is property protection for physical damage to equipment, furnishings, building and supplies due to fire and other perils.
The second is premises liability coverage to protect customers due to slips, trips and falls on the premises, as well as for consumption of food products.
The final need is protection for employees due to frequent cuts, burns and other common employee injuries. Establishments that sell or serve liquor or other alcoholic beverages also need liquor liability coverage.
Slips and falls, along with customer illness due to being served tainted food or drink, are the primary liability exposures. The commercial general liability (CGL) is used to provide coverage for these exposures.
It is important to note that liquor liability coverage is excluded under the CGL form if a risk is in the business of serving alcoholic beverages. Many establishments in this category should therefore consider purchasing a separate liquor liability coverage form.
Restaurant kitchen equipment, inventory and dining room fixtures are common exposures for most eating and drinking places. Many of these establishments do not own the buildings they occupy but have long-term leases and have invested money in various improvements and betterments, including cooking equipment, dining room decorations and permanent fixtures.
There are major differences in the food service business and the very different exposures they present. There are many specific types of restaurants to cater to individual needs and tastes. There a several main commercial insurance classifications for food service.
Concessionaires: The most basic "eat on the run" type of restaurant is not classified as a restaurant at all but is referred to as a concessionaire. Class Code 11168: Concessionaires applies and the accompanying note states that all food and beverages must be sold through hawking or peddling. There can be no location to which customers walk up and purchase the food. This classification includes food sold at sporting events, exhibitions, and parks.
Caterers: Are very similar to restaurants with significant differences. The caterer prepares the meals at its own kitchen or commissary and then transports it to the locations where it will be served. Some final preparation may take place at the final location but the majority generally takes place at the caterer's location. The caterer's employees serve the meals and beverages and oversee the consumption of the food.
Restaurants: The way restaurants are categorized and classified uses the percentage of alcoholic beverage sales as the first criteria, followed by other features or operations.
Common to all of these categories is that entertainment-oriented venues such as nightclubs, cabarets, dance halls, discotheques, and comedy clubs must be separately classified and rated. This means that the sales that those entertainment activities generate must be broken out and rated separately from the sale or food and drink.
Minimum recommended small business insurance coverage: Business Personal Property, Business Income and Extra Expense, Spoilage, Equipment Breakdown, Employee Dishonesty, Money and Securities, Computers, Valuable Papers and Records, General Liability, Employee Benefits, Umbrella, Hired and Nonowned Auto & Workers Compensation.
Other commercial insurance policies to consider: Building, Earthquake, Flood, Leasehold Interest, Real Property Legal Liability, Accounts Receivables, Bailees Customers, Fine Arts, Cyber Liability, Employment-related Practices, Environmental Impairment, Liquor Liability, Business Automobile Liability and Physical Damage, Garagekeepers and Stop Gap Liability.