Though not as popular a shopping destination as they once were, department stores still have a significant stronghold in American consumerism. Often the anchor stores of shopping malls and complexes, these stores provide shoppers with a number of different products and services in a one-stop-shopping format. If you own a department store, you will want to be sure to protect your investment with a sound business insurance package. Independent insurance agents can help you build a policy portfolio that protects your department store from its various exposures.
2014 Department Store Industry Facts From IBISWorld
- There are currently 68 department store chains operating in the United States.
- These stores employ more than 941,130 people.
- The department store industry generates about $164 billion in revenue each year.
Your Department Store Needs Sufficient Property Damage Coverage
Department stores are stocked with a lot of merchandise and other business property. It is important that this property be properly insured against loss or damage. Some property coverage types you may want to discuss with your insurance agent include:
- Building insurance: If your business owns the building or buildings in which your retail space is located or the warehouses where inventory is stocked, you will need to protect the structure of these buildings with a sufficient amount of building insurance.
- Business property insurance: This covers the business-owned property inside your stores or warehouses against such hazards as fire, wind and vandalism. Covered property includes your inventory, computer systems, cash registers, shelving, racks, display units, light fixtures, furnishings, flooring and décor.
- Flood insurance: Coverage for flood damage is specifically excluded from nearly all business insurance policies. Because floodwaters can cause significant damage, you may want to consider supplementing your coverage with a commercial flood insurance policy through the NFIP (National Flood Insurance Program).
- Earthquake insurance: Damage caused by earthquakes is also excluded by nearly all business insurance policies. If your department store is at risk, you may want to supplement your coverage with an earthquake insurance policy.
- Crime insurance: Crime insurance can protect your business against losses stemming from robberies. You can buy specific coverage to handle the risks you face both in your store and off-premises, such as during a delivery or while taking cash to the bank for a deposit. You can also cover yourself against crimes committed by employees while on the job through an employee dishonestly insurance policy.
Get the Right Kinds of Liability Insurance for Your Department Store
A liability lawsuit can result in a very expensive loss for your department store, so liability insurance coverage is crucial to the health of your business. Liability insurance protects your store by covering legal defense fees, court costs and other related financial damages if you are sued for a covered event. There are a number of different types of liability insurance available. You may want to talk to your independent insurance agent about the following liability insurance types:
- Commercial general liability insurance: This is a basic liability insurance policy, often referred to as CGL, that covers a number of common liability exposures faced by businesses, particularly those in the retail industry. These include:
- Premises liability insurance: This protects against injuries or property damage suffered by third-parties while they are on your department store’s property.
- Product liability insurance: This protects against injuries or property damage caused by faulty or defective products sold in your store.
- Advertising liability insurance: This protects against claims of copyright or trademark infringement for the purposes of promoting a product or service.
- Personal injury liability insurance: This protects against claims of libel and slander.
- Professional liability insurance: If your department store includes a hair salon or other similar professional services, you will want to ensure that you have professional liability insurance. This protects your business from lawsuits stemming from damage caused by mistakes, negligence or even improper advice.
- Employment practices liability insurance: This provides coverage in the event that an employee sues your department store for any number of illegal business practices, such as breach of contract, wrongful termination or discrimination.
- Auto liability insurance: If your department store owns a company vehicle or a fleet of vehicles, such as would be used for product deliveries, you will need to cover them with commercial auto insurance. Likewise, if your employees occasionally use their personally owned vehicles for company business, you can protect your store from potential liability charges through hired or non-owned vehicle insurance coverage.
- Cyber liability insurance: Many shoppers at department stores pay for their purchases with credit cards. If your business’s computer system is hacked, criminals may gain access to credit card numbers and expiration dates, thus compromising the cards. This may result in hefty lawsuits from customers, banks and credit card companies; as a result, you may need to pay for credit monitoring services for affected customers. Cyber liability insurance provides coverage for this type of scenario.
- Umbrella insurance: Insurance companies typically have caps on the amount of liability coverage you can purchase. If you feel that you need extra liability protection, you can purchase an umbrella insurance policy that will take over where your other liability coverage leaves off. This is a relatively inexpensive way to significantly raise your coverage limits.
What Other Department Store Insurance Coverage Do You Need?
In addition to the property and liability coverage mentioned above, there are other insurance coverage types that may be required or are at least worth considering. These are:
- Business income insurance: This provides your department store with a continuation of income if a covered disaster forces you to close shop while repairs are made.
- Workers’ compensation insurance: Department stores have a lot of employees, and this increases the risk that employees will become injured on the job. Workers’ compensation insurance provides coverage for necessary medical treatment, paid time off and other financial losses associated with employee injuries.
- Health insurance: As your business is likely to employ at least 50 full-time workers, you will be required under the Affordable Care Act to provide these employees with subsidized health insurance. An independent agent can help you review your options.
- Life insurance: If you wish to include life insurance as part of your employee benefits package or if you are looking for coverage for principals in your business, you can speak with your independent insurance agent about your various options.
Your independent insurance agent can review your business operations with you and can make coverage and policy recommendations as seen fit.
Get Help Building a Strong Department Store Insurance Portfolio
Purchasing commercial insurance coverage for a business as complex as a department store can be a difficult process. It is therefore to your benefit to work with an independent agent in the Trusted Choice® network who can help you assess your exposures and can recommend the right kind of coverage to mitigate these risks. These agents can also help you by shopping around for competitively priced policies that can provide the coverage you need. Find a Trusted Choice agent near you to learn more about purchasing insurance for your department store.