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What Does Shop Insurance Cover?

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Conducting business from retail premises can mean interacting with the public, storing inventory and being exposed to risks such as theft or vandalism. Shop insurance will protect shop owners from third party claims liability as well as paying for the cost of certain losses and replacement of items if another type of disaster occurs.

Due to the type of claims that retail companies can receive, shop insurance can be designed around the needs of the business and include multiple coverage types. For example, insurance can range from contents insurance to product liability insurance to a number of other add-on coverages.

At the minimum, shop owners will typically require public liability, employers’ liability, and contents insurance to protect their interest, but many other insurance types may need to be added.

Public liability insurance will protect against claims brought by a third party. For example, a customer entering the shop and tripping over empty boxes causing a twisted ankle could have reasonable grounds to make a claim.

Employers’ liability insurance will help to defend claims made by employees against the business. These may be for accidents or illnesses caused by work-related activities.

Contents insurance covers the cost of replacing stock or shop fixtures and fittings due to theft, damage, or loss. However, any thefts from break-ins resulting from negligence (e.g. leaving the shop unlocked) will not be covered.

A shop insurance policy may also include coverage for:

  • Product liability
  • Business equipment 
  • Personal accident
  • Commercial buildings cover
  • Business interruption
  • Professional indemnity

Each type of insurance policy serves a specific purpose, and shop owners will need to determine which types are needed for their business. It may be wise to consult with an insurance professional to ensure all needed coverage types are added to the policy.

If the shop relies on a number of computers, printers, and electronic items that would be expensive to replace, then business equipment insurance may be required. In addition, product liability coverage may be needed for shops that make or sell items to shield against injury claims or problems caused by product issues or defects.

Personal accident insurance will cover loss of earnings and other expenses for the shop owner in the event of critical illness or injury, and professional indemnity will shield business owners from claims resulting from bad advice, poor service, or errors due to negligence.

If the business premises happen to be owned rather than rented or leased, then the building will need to be protected from fire or flood damage and theft with commercial buildings insurance. For businesses that experience problems with fire or flooding, normal operations may be disrupted or even ceased for several months at a time until repairs are completed; business interruption insurance will help to cover the cost of damages.

Are shops insured against theft?

If a shop is broken into and items are stolen, contents insurance and covering losses caused by fire and other issues will cover the cost of replacing stolen stock, fixtures, or fittings. Losing stock and products due to theft is a common issue that many retail owners have to face.

However, contents insurance coverage will only apply if there have been signs of a break-in. For example, if the shop has been left unsecured by way of an unlocked door or open window allowing access, then cover will not apply under those circumstances. Contents insurance also does not cover any items that are lost through shoplifting activity.

Special equipment and items needed to operate the business may also be stolen during the course of a break-in; laptops, cash registers and other items may be taken, but they will only be protected if business equipment insurance has been purchased.

Are shop windows covered in buildings insurance?

Damages to shop windows can be costly to repair, and broken windows caused by damage or vandalism will need to be fixed and paid for. Unlike residential lettings where the landlord is responsible for window replacement, the responsibility will fall to the tenant for commercial properties. For window breakage, damage or replacement, the tenant will be expected to bear the cost, but the terms of the lease agreement should be clarified to make sure.

Owner-occupiers will need to make sure that the cost of glass replacement is included in their insurance policy. Many commercial buildings policies include glass cover as standard for the sake of convenience. This type of coverage is sometimes called ‘shop front insurance’, and insurers may impose a price limit on the cost of repair. However, some companies that include glass cover for commercial premises do not stipulate any price limitation for repair costs.

Depending on the insurance provider used and the product that is chosen, shop owners may need to add glass cover to the policy separately as extra coverage. In this case, the cost of window replacement will need to be provided to the insurer.

Research Sources:

https://www.nimblefins.co.uk/business-insurance/shop-insurance

https://startups.co.uk/insurance/shop-insurance-cover/

https://www.insight-law.co.uk/blog/your-responsibilities-as-a-commercial-landlord/

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