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.
Below are some answers to commonly asked grocery store insurance questions:
- What Is Grocery Store Insurance?
- How Much Does Grocery Store Insurance Cost?
- Why Do Grocery Stores Need Insurance?
- What Type Of Insurance Do Grocery Stores Need?
- What Are Grocery Stores Risks & Exposures?
- What Does Grocery Store Insurance Cover & Pay For?
What Is Grocery Store Insurance?
Grocery store insurance is a type of insurance that specifically covers the risks and liabilities associated with operating a grocery store. This can include coverage for property damage, theft, liability for injuries or accidents that occur on the premises, and loss of income due to business interruption.
Some policies may also include coverage for food spoilage and contamination, as well as protection against cyber attacks and data breaches. The exact coverage provided by a grocery store insurance policy will vary depending on the specific policy and the needs of the business.
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 grocery stores ranges from $47 to $79 per month based on location, size, payroll, sales and experience.
Why Do Grocery Stores Need Insurance?
Grocery stores need insurance to protect their businesses from potential risks and losses. Some potential risks that a grocery store may face include:
Property damage: A grocery store may need insurance to cover damage to its building, equipment, and inventory due to events such as natural disasters, fires, or accidents.
Liability: A grocery store may be sued if a customer is injured on the premises or if the store's products cause harm to a customer. Liability insurance can help cover the costs of legal fees and any settlements or judgments.
Business interruption: If a grocery store has to close temporarily due to a covered event, such as a natural disaster, business interruption insurance can help compensate for lost income.
Employee injuries: If an employee is injured on the job, workers' compensation insurance can help cover medical expenses and lost wages.
By carrying Grocery store insurance, they are protected itself from the financial consequences of these and other risks, helping to ensure the stability and success of the business.
What Type Of Insurance Do Grocery Stores Need?
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.
What Are 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.
What Does Grocery Store Insurance Cover & Pay For?
There are various reasons why grocery stores can be sued, including slip-and-fall accidents, food contamination or illness, product liability claims, employment disputes, and personal injury claims. Insurance can protect grocery stores from such lawsuits by providing coverage for legal costs, settlements or judgments, and other expenses. Here are a few examples:
- Slip-and-Fall Accidents: A customer slips and falls on a wet floor in the grocery store, resulting in injuries. The customer may sue the store for negligence in failing to maintain a safe environment. Insurance coverage, such as General Liability Insurance, can help pay for legal costs, medical expenses, and other damages related to the incident.
- Food Contamination or Illness: If a customer falls ill due to food purchased from the grocery store, they may sue the store for selling contaminated or expired products. Insurance coverage, such as Product Liability Insurance, can help pay for legal costs and any damages awarded to the customer.
- Product Liability Claims: A customer may sue a grocery store for injuries caused by a defective product sold in the store. Insurance coverage, such as Product Liability Insurance, can help pay for legal costs and any damages awarded to the customer.
- Employment Disputes: An employee may sue a grocery store for discrimination, harassment, or wrongful termination. Insurance coverage, such as Employment Practices Liability Insurance, can help pay for legal costs and any damages awarded to the employee.
- Personal Injury Claims: A customer may sue a grocery store for injuries sustained on the store's property, such as falling from a damaged shelving unit or being hit by a shopping cart. Insurance coverage, such as General Liability Insurance, can help pay for legal costs and any damages awarded to the customer.
In summary, insurance can protect grocery stores from lawsuits by providing coverage for legal costs, settlements or judgments, and other expenses. Different types of insurance policies can cover different types of claims, and it's important for grocery stores to have adequate coverage to protect themselves from potential lawsuits.
Commercial Insurance And Business Industry Classification
- SIC CODE: 5411 Grocery Stores
- NAICS CODE: 445110 Supermarkets and Other Grocery (except Convenience) Stores
- Suggested Workers Compensation Code(s): 8033 Store - Supermarket
Description for 5411: Grocery Stores
Division G: Retail Trade | Major Group 54: Food Stores | Industry Group 541: Grocery Stores
5411 Grocery Stores: Stores, commonly known as supermarkets, food stores, and grocery stores, primarily engaged in the retail sale of all sorts of canned foods and dry goods, such as tea, coffee, spices, sugar, and flour; fresh fruits and vegetables; and fresh and prepared meats, fish, and poultry.
- Convenience food stores-retail
- Food markets-retail
- Frozen food and freezer plans, except meat-retail
- Grocery stores, with or without fresh meat-retail
- Supermarkets, grocery-retail
Grocery Store Insurance - The Bottom Line
To find out which type of grocery store 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.
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
- Coffee Shop
- Concession Stand
- Farmers Market
- Grocery Store
- Ice Cream Shop
- Internet Cafe
- Liquor Liability
- Liquor Store
- Sandwich Shops
- Specialty Food And Restaurants
The food service industry is a vital part of the economy and plays a crucial role in providing food to individuals and businesses. However, it is also a high-risk industry that is prone to numerous potential liabilities and risks. That's why it's important for food service businesses to have insurance in place to protect themselves against financial losses and legal issues.
One of the main reasons the food service industry needs commercial insurance is to protect against liability claims. When running a food service business, there is a risk of someone getting sick or injured due to food poisoning or food allergies. Insurance can provide coverage for these types of claims, helping to cover the costs of legal fees and damages.
Another reason the food service industry needs insurance is to protect against property damage. This can include damage to the business's physical location, such as from a fire or natural disaster, or damage to equipment, such as kitchen appliances. Commercial insurance can help cover the costs of repairs or replacement, ensuring that the business can continue to operate smoothly.
Additionally, commercial insurance can provide coverage for losses due to unexpected events, such as theft or vandalism. This can be especially important for food service businesses, as food products and equipment can be expensive to replace.
The bar and liquor industry is highly susceptible to accidents and injuries. With the presence of alcohol, there is a higher risk of slip and fall accidents, fights, and other mishaps that could result in serious injuries to employees or patrons. Insurance can provide coverage for these types of incidents and help protect the business from financial liability.
In summary, business insurance is essential for the food service industry due to the numerous risks and liabilities that can arise. It can provide financial protection against potential losses and legal issues, helping businesses to operate safely and securely.
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.