Many people turn to health food and nutrition stores to find products that can help them improve their health, enhance their workouts and help them lose weight. It is a growing industry that attracts new customers every year. If you own a health food and supplement store, you will want to be sure to protect your investment with a suitable business insurance package. Independent insurance agents can help you build a nutrition store policy portfolio designed to limit your risk of financial losses.
2014 Health Food & Supplement Store Industry Facts From IBISWorld
- There are more than 2,000 health food & supplement store franchise businesses operating in the United States.
- These franchises offer full-time employment to more than 3,000 people.
- The health food & supplement industry generates about $504 million in revenue each year.
What Could Go Wrong at a Health Food & Supplement Store?
Health and nutritional supplements are not regulated by the FDA, so it is possible to sell products that pose a risk to people’s heath. This is just one of the many ways that your business can find itself on the wrong end of a lawsuit. The right business insurance can help protect your nutrition store from financial losses in a number of instances including the following scenarios:
- While reaching for an item on a high shelf, a customer in your store is struck by several products, which causes head and neck injuries that require surgery. The customer sues your store.
- A product that you sell in your store is shown to cause heart problems. Several people who have taken the supplement and experienced adverse health problems band together in a class-action lawsuit. Your store is named as one of the defendants.
- An employee highly recommends a nutrition supplement to a customer in amounts that exceed the recommended dosage. Your customer is sickened due to a vitamin overdose and must spend time in the hospital. The customer sues your business.
Property Insurance Protects Your Nutrition Store’s Inventory
A lot of your business capital is likely tied up in the property and inventory you keep in your health and nutrition store. Property insurance provides you with compensation if these items are lost or damaged by a covered event, such as fire, storms, heavy winds, vandalism or theft. There are several types of property insurance, among them the following:
- Building insurance: This insurance is necessary only if you own the building in which your nutrition store is located. If you rent the retail space, your landlord will be responsible for covering damage to the structure of the building.
- Business property insurance: This insurance covers the business property you keep inside your retail space. This includes product inventory, shelving, display cases, signage, registers, computer systems and décor.
- Flood insurance: Because commercial insurance policies specifically exclude coverage for damage caused by floods, if your business is at risk, you will want to be sure to ask your independent agent to help you secure a commercial flood insurance policy through the NFIP (National Flood Insurance Program).
- Backup of sewers and drains insurance: Sometimes, flooding in your retail space can be caused by the backup of the sewer or drain systems. In this case, flood insurance is not the answer. You would need to have an endorsement on your business property insurance that allows for coverage caused by this type of backup. If your retail space is at or below ground level, you may want to discuss this policy endorsement with your insurance agent.
Be Sure to Have the Proper Liability Insurance for Your Nutrition Store
Liability lawsuits can be financially draining for your business. Regardless of whether or not the suit holds merit, you will need to shell out money for legal defense fees, and that can add up. A ruling against your business can be financially devastating. That is why commercial insurance companies offer liability insurance. This insurance covers legal defense fees, court costs and financial damages for lawsuits stemming from covered events.
There are several types of liability insurance. You may want to discuss the following types with your insurance agent:
- Professional liability insurance: This may be necessary to protect your business in the event that an employee strongly recommends a product to a customer and that customer is sickened for any number of reasons, such as the product's interacting badly with a medication the customer takes or the product's greatly increasing the risk of a heart attack to a customer that has high blood pressure. It is possible that your commercial insurance provider may exclude this coverage given the risks associated with your business. In this case, your independent agent can help you find supplementary insurance to cover this exposure.
- Product liability insurance: As mentioned before, nutritional supplements are not regulated by the FDA. Even if the product you are selling is known to be safe, it is difficult to know for certain that what is listed on the label is actually what is in the bottle. While financial penalties for hazardous or wrongly labeled products will likely be the responsibility of the product manufacturer, it is quite possible that your store can be named in a lawsuit, particularly if the product is one that you have been actively promoting to your customers.
- Premises liability insurance: This insurance provides coverage if a customer or other third party suffers property damage or bodily injury while on your nutrition store’s premises.
- Employment practices liability insurance: This provides coverage for your legal defense fees and potential financial damages in the event that an employee sues your business for sexual harassment, wrongful termination, discrimination or any other illegal business practice.
What Other Insurance Coverage Do You Need for Your Health Food Store?
In addition to the property and liability coverage mentioned above, there are other insurance types you may want to discuss with your agent. These include the following:
- Business income Insurance: This insurance provides a continuation of income if a covered event forces you to close your nutrition store for an extended period of time while repairs are made.
- Workers’ compensation insurance: Required in most states, this covers necessary medical treatment related to injuries suffered by employees on the job.
- Employee dishonesty insurance: This protects your business from financial losses if one of your employees steals from your nutrition store business or engages in other illegal behavior while on the job.
An independent insurance agent can help you identify your exposures and recommend the right coverage to mitigate those risks.
Get Help Building a Strong Health and Nutrition Store Insurance Portfolio
Purchasing the right insurance for your health food and supplement store can be a complex process, particularly if you are buying business insurance for the first time. This is why it is to your benefit to work with an independent agent in the Trusted Choice® network. These experienced agents can explain your various coverage options and can recommend policies that can fill coverage gaps. They can also shop around to find you suitable coverage at a competitive rate. Find a Trusted Choice agent near you to learn more about purchasing insurance for your nutrition store.