What Insurance Do You Need For a Shop?

All shop owners should want to protect their business from risks, which is why taking out shop insurance is a sensible move for any shop owner who is serious about their business. However, knowing what insurance for shops is a legal requirement and which is optional will help you decide what coverage to include in your policy.

Just like any other UK business, your shop faces many risks. This is why taking out insurance will help protect your assets and help you to get back up and running again following a serious event, such as fire, flood, theft or vandalism.

But it is not only major disasters such as fire and flood that you should protect your shop against. Insurance for retail shops offers many levels of protection against the unexpected, such as a customer slipping and falling on a wet floor and claiming compensation for an injury or damage to their personal property.

What are the different kinds of shop insurance?

Shop owners face different risks and challenges, many of which are more prevalent in a retail shop setting than in a business that doesn’t work face-to-face with its customers. This is why taking out a ready-made business insurance package is not the best idea because much of the coverage included in the policy may not be relevant in a retail shop setting.

It is far better to work with a professional business insurance broker, such as Brisco Business Insurance, because we can help you shop for insurance that will be more relevant to your business type.

One of the most common questions asked of us is, ‘what insurance do I need for a shop?’ The answer to this is almost always employer’s liability insurance if you employ staff in your shop and public liability insurance. These business insurances are considered the two most essential elements to include in your policy.

Following is a breakdown of the most helpful insurance protection to include in your shop insurance policy, including employer’s liability insurance, which is required by law if you employ staff in your shop. However, you may want to consider taking out the following optional insurances to completely protect your business from risk on top of these two essential elements:

• Business contents and equipment insurance
• Business interruption insurance
• Business legal protection insurance
• Personal accident insurance
• Shop premises (buildings) insurance
• Stock insurance

Public liability insurance

Public liability insurance has long been considered a ‘must-have’ insurance for shop owners. This coverage should make up the core of your policy as it is designed to protect businesses that have direct contact with their customers and members of the public.

You wouldn’t have a business without customers coming into your shop to buy your goods or services. Protecting your customers from risks should be your priority. Still, accidents happen, and whether it was your fault or not, a customer is entitled to make a compensation claim for an injury or damage to their property caused by your business.

Public liability insurance will cover the compensation costs should your business be found at fault. With compensation claims sometimes running into the tens of thousands of pounds, could you afford to pay these costs out of your own pocket? Without this insurance, your business could face having to close down permanently.

Employer’s liability insurance

Any UK business that employs staff to work on their premises is obliged by law to protect themselves and their staff with employer’s liability insurance. This is a legal requirement unless you operate your shop as a sole trader and don’t employ any staff.

This insurance protects against the costs of an employee claiming compensation for injury or illness caused by your shop. Even when a staff member leaves your service, they can still claim compensation for an injury sustained or a disease contracted while in your employ.

You need to be careful here because if your business has employees and you don’t have employer’s liability insurance, you could be fined £2,500 every day you’re not insured. However, shop owners need to understand that even if you employ one part-time staff member, have volunteers helping in your shop that are not paid, offer seasonal work or accept work experience students, you will still need to be covered by employer’s liability insurance.

Product liability insurance

If you own a retail shop that sells physical products or gives them away for free, this can be an invaluable insurance to take out. Even though you may not personally design and manufacture the products you sell in your shop, you can be found liable should you sell a faulty product to a customer.

Faulty products, such as electrical goods, cosmetics and toiletries, household cleaners, food and drink, clothing and footwear etc., can cause an injury or damage to a customer’s property. Consider taking this insurance out if your business designs, manufactures, or supplies a physical product that is sold or given away for free.

You may be liable for paying out compensation if:

• You cannot identify the product’s manufacturer, or the manufacturer has gone out of business
• You imported the product from overseas
• Your business repairs, refurbishes, or changes a product
• Your business’s name is on the product

Product liability insurance will protect your business against the following:

• Loss of or damage to property caused by your faulty product
• Personal injuries caused by your defective product
• Unforeseeable circumstances, such as product faults that your quality control system could not identify

Business contents insurance

Business buildings and contents insurance usually go hand in hand, especially if you own the property you run your shop from. However, if you rent your shop from a commercial landlord, it is worth checking with them about their building insurance and what coverage it includes.

There are some instances where commercial landlords expect their business tenants to take out both building and contents insurance to protect themselves, so you should check the small print of your lease or ask your landlord for clarification about what insurance protection is included or not covered under your lease.

Business contents insurance will usually cover the fixtures and fittings in your shop. Still, you may want to consider including extra cover for your shop front, such as shop window glass insurance. Many commercial landlords allow their tenants to change their shop fronts to better suit the style and presentation of the shop, but in return, they would expect the tenant to provide their own shop-front insurance.

Conclusion

For many UK shop owners, deciding which insurance coverage you need can take time. Because shops are so diverse, it can help to talk to a business insurance specialist such as Brisco Business Insurance.

We can help you to compare insurance quotes from the leading UK insurance providers to find the most cost-effective protection for your business. However, it can be confusing to understand which is the best cover for your shop, so it can be reassuring to know that you can use our years of expert knowledge and expertise to help you choose the right coverage to meet your needs.

We can build you a retail business insurance policy that is perfectly tailored to your business. Yet, it could look very different to the policy of a neighbouring shop business that sells an entirely different range of products or services.

Maria Hickey

For more than 20 years, Maria has worked in the insurance sector and has extensive underwriting and customer service expertise. Maria is an experienced Senior Underwriter with a particular specialism for shop, office and surgery related insurance.

All articles by Maria Hickey