Do I need insurance for my retail business?
Retailers make big investments in time and money in their businesses. Several different types of insurance — with policies specifically tailored to the needs of retail businesses — can help protect them from a range of accidents and mishaps.
Depending on the policy, those incidents might include weather-related damage, malfunctions in utilities, theft, vandalism and other manmade problems. As you shop for insurance, here are three types of coverage to consider.
1. Commercial property insurance
Commercial property insurance is your “shop insurance.” It can protect your physical shop and contents against unforeseen losses tied to fire, storm damage, theft, vandalism, or damage from vehicles – and even airplanes, depending on the policy. Typically, this aspect of retail insurance policies reimburses you for covered events that cause damage to your building, outdoor sign, furniture, equipment, inventory, and potentially property of others that you keep on your premises.
Imagine that an electrical fire breaks out in the back office where you store your company's computer systems, your security camera equipment and your shop's extra inventory. When your insurance company is preparing to reimburse you for the damage to these items, it's important to have detailed records outlining everything you've purchased and how much you paid. This helps your adjuster assign value to what needs replacing.
Before you purchase a policy, make a list of everything inside your business that has monetary value, including the cost of the building, if you own it. If possible, maintain a backed-up digitized file of scanned receipts for items after you purchase or upgrade them. Taking photos and videos of your entire place of business and any ancillary areas, like storage, is another helpful way to document items your business owns.
Knowing the monetary value of these items beforehand can help an insurance agent tailor coverage to protect the property that's important for your business.
2. Liability insurance
Liability insurance can be thought of as your “customer insurance.” It can cover your business against accidents that affect customers or other visitors to the store. If, for example, a customer slips and falls on a wet floor in your store and is injured, liability insurance could cover medical costs, legal fees and damages for which you are legally responsible. Liability insurance typically won't cover employee injuries, employee disputes, or damage to company vehicles. Each of these issues requires separate insurance coverage.
You can customize liability insurance to cover unique aspects of your business by adding umbrella policies. An agent might suggest employment-related practices insurance to cover your company in the event of a wrongful termination lawsuit, or liquor liability insurance that can protect your company against claims resulting from alcohol being served at your business.
3. Business income coverage
Business income insurance is your “ride-out-the-storm insurance.” It works with your property insurance to reimburse income lost during a covered event like fire, wind, hail, or vandalism. Perhaps your business must shut down temporarily to repair damage from a storm. This coverage can replace lost net income or pay for ongoing expenses, including payroll or the mortgage, and for relocation expenses if necessary.
This type of coverage is also customizable. If your suppliers are unable to produce goods your business depends on, for example, an agent might suggest a dependent property coverage endorsement. This policy add-on can cover loss of income or an increase in expenses that results from covered damage to another organization that your company depends on for supplies or services.
An agent can provide direction on retail business insurance
The best way to ensure that your insurance coverage addresses your needs is to speak with an agent. An experienced agent has the knowledge to ask the right questions, and to make suggestions, including add-ons or umbrella policies that can let you be confident that your retail business insurance provides the right protection for your situation. When you're ready to buy retail insurance, reach out to a Nationwide agent about your coverage options.