There’s something exciting about retail business. The idea of selling a physical product that your clients can hold in their hands is very special.
Whether you’re running a bricks and mortar store or full e-commerce, having the right insurance is vital to protecting your retail business.
We’ve been helping retail businesses for over a decade, and can help you from the very start of setting up on online store, or if you’ve grown to a multi-site retailer.
For more information or a quote please call us on 1800 811 888.
Continue reading below for our Patch retailers insurance guide.
Retailers Insurance Guide
In this guide we’ll run through some of the most common forms of insurance required by a retail business.
Much of it will focus on the traditional bricks and mortar retailers, but we’ll also touch on ecommerce. A full ecommerce insurance guide is still in the works…
Public Liability Insurance
Almost every business is going to need public liability insurance, regardless of whether your store has an online presence or not.
Public liability insurance will protect your business in the event that a third party suffers personal injury or property damage as a result of your business activities.
For a traditional retailer we’re talking about the classic slip-and-fall type claims. Anyone in the retail business will likely be familiar with this type of claim.
Given just how large these types of claims can be, it would be madness to operate a retail store without cover in place.
You will most likely find that any store lease, whether it’s in a big shopping complex or otherwise, will stipulate that you have public liability insurance in place when signing the lease.
Even if you’re operating as an ecommerce business without a physical store, it’s still important to have public liability in place.
If you’re running a small start-up from home you could still have delivery drivers or sales reps coming into your home. If they suffer an injury on your property you can still be liable.
If your ecommerce business has grown into its own warehouse, then public liability insurance will be an absolute must, and will most likely be stipulated on your lease.
Product Liability Insurance
Most public liability policies will include product liability, and for any type of retailer this is mighty important.
Whilst public liability is more about people suffering a loss due to your actions (or inactions), product liability is all about the products you sell.
If a third party suffers property damage or personal injury due to a product you have supplied, it is product liability insurance that will protect you and your business.
It can be a tricky area with many different parties involved in the supply of a product. You have the manufacturer, the wholesaler and maybe an importer.
You might think that they are responsible for the product – especially the manufacturer – but that is not always the case.
In the event of a claim it’s typical that all parties are dragged into the claim. They won’t just go after the manufacturer; they’ll go after everyone who has had any involvement in the supply of that product.
Whilst the ultimate responsibility for the injury or damage might end up being with the manufacturer or importer, you could still incur significant legal costs before it reaches that point.
Your public liability insurance includes defence costs, which can cover your legal costs in defending your business from the claim.
As mentioned, product liability is generally included in public liability as no extra cost, but any retail business should be double checking that with their broker (such as Patch) to ensure they are properly covered.
Contents & Stock Insurance
Regardless of whether you run a physical or virtual store, you’re likely going to have some level of stock that needs to be insured.
It might be a few grand worth of stock for your home business, or millions of dollars’ worth of stock across multiple stores and warehouses around the country.
Either way, it needs protecting from a range of risks such as fire, water and theft.
In addition to your stock there is also your fit-out and furniture, along with computer and point-of-sale equipment etc.
Our insurance brokers can run through your assets to put together a package to full protect your stock, contents and other business assets.
Business Interruption Insurance
If your retail store is unable to operate due to factors outside of your control, it can be devastating to your cashflow and the viability of your business.
Business interruption insurance can protect your cashflows by insuring them against events such as flooding, fire and other damage.
Having a solid insurance package in place for your retail business is great, but without business interruption insurance you could still be leaving your business in serious danger.
Here’s an example…
Let’s say you run a medium sized retail business in a freestanding property, and a devastating fire results in the loss of everything including the building itself.
The building itself was insured and can rebuilt, all of your contents and stock was insured and can be replaced, and initially you don’t have any major uninsured losses.
But what if the building is going to take six months to rebuild? What if your business type can’t really operate from alternative premises, and you need to rebuild on the same site?
How would your business survive with no revenue for half a year? You could find that even though you had all of your physical assets covered, you still run out of money and have to close down before the building has even been rebuilt…
If you had business interruption insurance, it would have covered your lost revenues until you were able to reopen the store.
That’s quite an extreme example, but it shows how business interruption insurance can help save a retail business, even when all of your other more common insurance policies were in place.
Less extreme examples could include flooding, where you might not necessarily suffer any damage to your own store, but customers and staff cannot access the shopping complex due to flood.
In this case your business interruption insurance could cover lost revenues for that period of time.
It’s important to note that business interruption insurance is a more complex form or insurance, and level of cover and options can vary widely. It’s best to speak with one of our insurance brokers to see how the policy could work for you.
More Information
The next step in protecting your retail business is to speak with one of our insurance brokers.
You don’t need to make time for an appointment, as we can help you out over the phone and via email, or even via video call if you prefer.
We’ve been helping businesses like this for over a decade, from small start-ups to established businesses with tens of millions in annual revenues.
Our brokers will answer your questions about insurance, and will ask plenty of questions about your business so they can put together some recommendations and insurance quotes for you.
Call our office on 1800 811 888 to get started.
