There are more than one million retail establishments in the United States. Some have only one storefront while others have a chain of stores located in multiple locations. Whether you established your own retail business or bought a privately-owned franchise, you will want to be sure to protect your business venture with a suitable retail insurance policy.
U.S. Retail Statistics
- Retail stores employ more than 15 million Americans
- 4.06 million are salespeople
- 2.73 million are cashiers
- 1.26 million are stock clerks and order fillers
- 1.10 million are first-line supervisors or managers
- 281 thousand are customer service representatives
- Retail employees earn an average of $16.65 an hour
- These employees work an average of 31.5 hours a week
- Over the past two years, more jobs were created than lost in this industry
What Is Retail Business Insurance?
Retail insurance is a customized form of business insurance. It is specifically designed to provide retail store owners like you with the coverage you need to keep your business operational even in the event of a catastrophe or a lawsuit. Retail business insurance is actually a package of insurance options that you customize to protect yourself against the risks you face as the owner of a retail operation. These insurance plans can be fine-tuned to meet your needs and budget, no matter the size or type of operation you run.
Nearly half of all retail businesses that temporarily close their doors after a natural disaster fail within 5 years. A solid business plan coupled with a retail insurance policy can prevent large financial losses and allow your retail store to remain profitable regardless of what unexpected event comes your way.
What Types of Insurance Do Retail Business Owners Need?
Retail businesses can range from a small corner store to a large chain of stores that are found in several states. When you run a retail business, there are some commercial insurance policies you will need to secure, either to meet state requirements or to protect your business venture. These include:
- Unemployment insurance: Once you establish and register your business with your state’s workforce agency, they will begin collecting state taxes and sales taxes from you. Through these taxes, you will automatically be purchasing mandatory state unemployment insurance.
- Disability insurance: You are required by law to purchase this insurance if you have employees working in any one of the following six locations: California, Hawaii, New Jersey, New York, Rhode Island or Puerto Rico.
- Medical insurance: The Affordable Healthcare Act requires small businesses that employ more than 50 full-time people to provide their employees with medical benefits. A Trusted Choice member agent can help you find affordable rates through group insurance plans for small businesses.
- Commercial auto insurance: If your retail store offers delivery services and has a company owned vehicle or fleet of vehicles, you will be required to purchase commercial vehicle insurance that meets your state’s mandated minimum liability coverage amounts.
- Flood insurance: Most business insurance plans exclude flood damage from their coverage. If your store is located in a flood-prone area, you can protect it by purchasing a federally-backed business flood insurance policy. Agents in the Trusted Choice network can provide you with more information.
- Business insurance: If you have taken out a large business loan or rent your retail space, you may be required by your lender or your landlord to carry business insurance. Whether or not it is required, this insurance coverage can protect your retail business so that it can remain profitable, even in the face of a disaster.
Retail Business Insurance Protects Property and Assets
Retailers insurance offers a variety of coverage options to help you protect your business assets. If you own a small, single-location store, general property insurance may be sufficient. Larger retail establishments and those that carry specialized goods and services require other coverage options to achieve full coverage. Some retail insurance coverage options include:
- General property insurance: This provides coverage for the merchandise in your store as well as property such as wall-décor, shelves, racks, counters and furniture. If merchandise is lost or damaged because of severe weather, fire, vandalism or major theft, this insurance can provide compensation for your loss. Coverage against shoplifting may be limited or non-existent.
- Computer property insurance: Computers are often necessary for recording transactions and inventory. This insurance provides coverage for computer equipment used in your store or stores in the event that they are rendered useless because of a virus or need specialized service for repairs or problems.
- Backup of sewer or drain insurance: While flood insurance is generally not covered, if a sewer or drain-backup causes costly water damage to your merchandise or flooring, this coverage can offer you compensation so that you can repair or replace damaged items.
- Signage insurance: The signs posted outside your store can often be quite expensive. If they are damaged by a fire, severe weather or vandalism, this insurance will provide you with compensation to replace them.
Retail Business Insurance Provides Liability Coverage
In today’s litigious society, you should never underestimate the importance of retail liability insurance. Any time you have customers in your store or using your products, you open yourself up to liability charges. Retail liability insurance can protect you in the following areas:
- General liability: If a customer slips and falls in your store or is otherwise injured while on your property, you may be sued for medical costs and damages. General liability insurance will provide you with coverage.
- Product liability: If a product or service that you are selling in your store causes injuries, illness or property damage to your customers, you may be held liable. Product liability insurance will provide coverage against faulty products.
- Workers compensation insurance: If an employee is injured on the job, you are responsible for covering all resulting medical costs. This insurance provides you with the necessary coverage.
Your retail liability insurance coverage also includes any related court costs and legal fees you may incur while defending your business against a liability suit.
Retail Business Insurance Offers Other Coverage Options
Retail insurance plans offer many addition coverage options. Among them are:
- Money and securities insurance: Retail stores tend to carry a lot of cash on the premises. If money is destroyed, lost or stolen from your place of business or en route to the bank to make a deposit, this coverage can provide compensation.
- Data compromise and identity restoration: This protects you from lawsuits if customer data is compromised or if you, the business owner or other named employees become victims of identity theft.
- Fidelity insurance: This will shield you from losses caused by the illegal actions of an employee, such as theft or embezzlement.
- Loss of income insurance: If your store is forced to temporarily close because of a covered event, this coverage can provide you with continued income so that you can pay employees and your monthly bills. This coverage is usually limited to one year.
- Utility interruption insurance: Some business cannot operate without phones, the internet, water, heat or electricity. If a utility companies fails to provide service for more than eight consecutive hours, this policy will provide you with loss of income coverage.
Find the Right Insurance Policy for Your Retail Business
Finding retail business insurance isn't as much of a challenge as understanding how much coverage your business needs to be fully protected, no matter what comes your way. You may need to do some legwork before you search for insurance to determine how much insurance you can purchase given your operations budget, and how much potential liability you face.
You may want to speak with a financial planner and a lawyer to help you plan out your budget and understand your risks. In the end, you'll need to work with an insurance agent that understands your business and can craft a policy to match it. Don't be fooled - it's in your best interest not to go with the first quote you get. It's highly advised that you seek out at least 3 quotes for coverage before you buy - just make sure you're looking at similar coverage. This way you can get peace of mind that you're comparing insurance that's well matched for your risks, and not more insurance than you actually need.