What is Shop Insurance?
Whether you run a café, corner shop, or clothes store, you’ll likely need shop insurance to protect your business. But where to start?
Naturally, your shop insurance policy will need to be tailored to your business. Its cover will depend on lots of factors, including where and how you operate, what stock you have on the premises, and if you have employees. If you would like to read more information or learn more about the pricing of business insurance, you can do so here .
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Don’t worry if you don’t have shop insurance or aren’t sure what kind of cover you’ll need. In this article, we’ll share with you:
What is shop insurance
Why you should get it
Different types of cover
Extra costs to consider
Flood risks
Online shop insurance
Cyber insurance
Where to get insurance
Taking out a shop insurance policy is a wise decision for any entrepreneur, as it mitigates future risk and gives you peace of mind if something should happen.
Many websites can offer quotes on your shop insurance, from GoCompare to Money Supermarket. But before you head to these sites and fill in your details, here’s a quick guide to what shop insurance is and how to find the best policy for your business.
What is shop insurance?
Shop insurance is a policy that covers your business’s shop, outlet or office space where you conduct business.
Good shop insurance should include three key aspects:
Protect your premises, stock, and employees
Protect you from customer claims or lawsuits
Protect you from natural disasters or unforeseeable events
Your business is unique and therefore requires a shop insurance policy that is tailored to its needs.
Why should I take out shop insurance?
Whilst it isn’t a legal requirement to take out shop insurance, it is highly recommended to take it out as an extra precaution, as issues and accidents are inevitable.
Without insurance, the costs of covering these issues could be high. Shop insurance can help protect you from unwanted lawsuits, damages, or loss of income, and most importantly, it offers a level of protection for you and your business.
You are only required to take out a business insurance policy if you employ other people. This is called Employers’ Liability Insurance.
What should my shop insurance policy cover?
If you’re taking out insurance for your business’s shop, there is a wide range of different types of coverage to choose from. Make sure you know what cover the policy includes and what will be an additional extra.
Here’s a breakdown of different cover types available with a shop insurance policy. Go through and note which ones would be useful to you, as this will help you better understand what insurance you’ll need when looking for quotes.
Business buildings’ insurance (owning the property)
Suppose you own the building your business operates in. In that case, this insurance will cover your building if anything should happen to it, such as damages by an event that’s covered under the policy. This could include burglary, vandalism, or a natural disaster.
Business buildings’ insurance (renting the property)
If you are renting the building your business operates in, you will need to speak to your landlord, as they may already have taken out a policy that covers your business.
This should be detailed within your leasing agreement, but check before you take out your own policy if you’re not sure.
Ensuring your business’s contents is the same as getting contents insurance for your home and household contents. Business contents insurance will protect the contents in your building, such as your furnishings, computers, and office equipment.
Business contents insurance doesn’t cover your business stock, so you’ll need to get this covered separately.
Business interruption cover
As a business owner, you can’t predict future events that might affect your business. Whether it’s a pandemic, flood, illness, or injury, you might want to take out cover to protect you.
This is particularly useful as it can help cover costs if you have rent to pay or have lost income whilst your business was interrupted.
This is compulsory cover if you employ people to work for your business. It is a legal requirement that covers your employees if they are injured or become ill as a result of the work they do for you.
Employers’ dishonesty insurance
Whilst it is unpleasant to think about, a very small minority of employees can be dishonest. You can include this insurance in your policy to cover your business against any income losses caused by your employees’ dishonesty, fraud, or theft.
On the chance that your products cause injury or illness to your customer, your product liability will cover compensation and your legal fees if the injured party decides to take legal action.
This cover is highly useful for small businesses, especially if you outsource your product and are not the manufacturer, as you can still be sued.
If your business includes offering advice and guidance, or sharing expertise to the public, you might be liable if a customer claims you were negligent in your professional advice. If you work in a consultancy industry, this cover will be particularly useful in covering legal fees or compensation.
Public liability insurance
Most businesses will need to engage with the public every day to serve customers or conduct sales. It is vital if your business interacts with people regularly that you take our public liability insurance.
This can cover legal fees and compensation if a customer or member of the public is hurt or injured whilst in your building, or their property is damaged, and they decide to take legal action.
If you are a business owner that sells stock, such as clothes, hand-made artwork, or technical goods, you’ll need to ensure you have stock cover. This protects any stock that is damaged or stolen whilst it is in your building or shop. You should generally ensure at cost price, not retail price.
Check the terms and conditions of your stock cover, as your insurer will expect you to keep your stock locked away or stored safely, as detailed in the cover. Failure to do so could invalidate your claim.
Adding the cover to your policy
Now you have a better idea of what covers to include that will best suit your business, you can start looking for the right shop insurance policy for you.
You can add the different covers to your policy and choose what level of coverage you’d like. For example, if you have expensive computers or equipment, you might want to insure it to a higher value. Just remember this will also make your premiums higher too.
Extra costs to consider
It’s worth noting that whilst your policy might include some levels of cover as standard, your business might require a cover that’s more niche.
For example, if your business requires special machinery or dangerous equipment, your insurance might be more expensive to cover any claims you make in future.
Your policy might also be more expensive if you have irreplaceable stock that is high value, such as unique artwork, expensive jewellery, or hand-crafted items. Depending on your circumstances, this could drive up the cost of your cover.
Flood-risks
It is unlikely that your shop or building will be operating within a high flood-risk area, but if it is, this will affect your shop insurance.
You will need to pay more for policies that ensure your business’s building, and if the risk is very high, you might struggle to find an insurer who will cover it. Make sure to do the research and call around different companies to see what they offer when it comes to flood risks.
Online shop insurance
It might seem surprising to some, but having an online shop is very similar to owning a physical one on the high street. You will need to ensure your online shop, such as protecting your stock, product liability, and even professional indemnity cover.
If you are working from home, you might be able to cover most of your shop insurance requirements through your house contents insurance. There are also business insurance policies that are specifically designed for entrepreneurs who have an office at home.
Cyber Insurance
Unfortunately, cyber security breaches are common and can lead to lawsuits and hefty fines. You could also have a damaging public relations incident and will need to rebuild your brand, or your online security services might need improving.
Taking out cyber insurance cover can protect you against these costs and compensate you for lost income.
Where can I get shop insurance?
Just like home or car insurance, there are lots of shop insurers out there. The best way to find the right insurer for you is to input all your business details and needs into a comparison website and compare quotes.
Make sure you check back to what types of cover you want to include and how much coverage you need, and if in doubt, call the insurers to chat through how their policy will protect you.
Other useful links from our knowledge centre:
Insurance for sole traders
What does SLA mean in business?
Is a charity a business?
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Ally Cox is a dedicated Copywriter and Blogger for CompareYourBusinessCosts.co.uk. In under two years, the platform achieved the esteemed accolade of ‘Website of the Year’. Since its award-winning debut, Ally has been instrumental in fostering organic growth for the website, expanding its offerings to encompass comparisons across a diverse range of over 20 products to help serve all your business needs.