Shop insurance - all you need to know

This article is provided by Simply Business

Whether you sell bunches of blooms or premium pet food, as a shop owner you have stock to protect, a business premises to take care of, and daily contact with customers and suppliers that could leave you open to compensation claims.

A comprehensive shop insurance policy can cover all these risks and more. Alternatively, if you run an online shop, the risks you face are slightly different, so the insurance you need will be slightly different too.

These are some of the main types of shop insurance, and some tips for picking exactly what you need before you buy your policy.

Public and product liability insurance

Public liability insurance can pay out if someone (including a customer, supplier or passer-by) makes a compensation claim against your business. It’s usually the key part of a shop insurance policy. For example, you fail to properly clean up a spillage at your grocery shop, and a customer slips and suffers an injury. Your public liability insurance could pay the compensation payment and legal fees, up to the limit of your policy.

Public liability insurance usually includes product liability cover too, which is important even if you don’t come into direct contact with suppliers and customers, perhaps because you run your shop online. This insurance can pay to cover compensation claims if someone suffers injury or property damage because of a product you’ve supplied. Even if you don’t manufacture the products you sell, you can still be found liable in some circumstances, for example if you’ve branded the products with the name of your business, or if the manufacturer can’t be traced or has gone out of business.

Employers’ liability insurance

If you employ anyone in your shop, employers’ liability insurance is usually a legal requirement. It can cover compensation claims if one of your employees or ex-employees suffers work-related injury or illness, for example if a member of staff slips over in the shop, or suffers a back injury due to heavy lifting. Although it’s a legal requirement for most employers, there are certain exceptions, for example if you only employ close family members you may not be legally required to have this insurance.

Stock insurance

Stock insurance can be crucial for shops, as it can pay to replace your stock if it’s stolen, damaged, or destroyed by something like fire or flood. Bear in mind that if you make a claim, the amount you receive will be based on the cost price of the stock rather than the retail price.

Shop buildings and contents insurance

If you own your business premises, you’ll probably want to insure it with buildings insurance, which provides cover if your shop is damaged or destroyed by something like fire, flood or vandalism. If your shop is rented, your landlord will probably insure the building, but you may want to buy contents insurance to make sure you’ve insured things like the furniture, appliances and decorative items.

Online retailer insurance

If you don’t have a shopfront because you run an online business - for example you’re an eBay, Amazon or Etsy seller - insurance could still be an important consideration. You probably won’t need business buildings insurance, but stock insurance could be vital if you store stock at home, as this is unlikely to be covered under your normal home insurance. Plus, remember that you can be sued if your product causes injury or damage, so product liability insurance is an important consideration.

Buying your shop insurance

  • You can tailor your policy depending on the insurance covers your shop needs, so you’re not paying for any unnecessary cover.
  • Shop insurance cover limits, exclusions and excesses vary from insurer to insurer, so it’s worth comparing quotes before you buy your policy.
  • Consider whether you’ll need to increase your cover levels during certain times of year: do you hold more stock in the run-up to Christmas, for example? Some policies will build this in automatically. 

This article is provided by Simply Business