Shop insurance

Whether you’re running a nail bar, deli or DIY store, shop insurance is a form of business insurance that protects your bricks-and-mortar retail business against various risks and claims.

These can come from customers who claim to have injured themselves or become ill through using your products. Shop insurance could also cover against damages inflicted by any employees you’re responsible for.

You may also want to protect your shop’s building, its contents and stock, and your employees.

In this guide, we'll help you discover which risks shop insurance can cover, from customer injuries to stock damage.

You can also learn why public liability and employers’ liability are important for customer-facing businesses and explore how to customise your policy to fit your shop’s needs, whether you sell electronics or groceries, or provide a service such as hairdressing or dry-cleaning.

The only type of retailer insurance that’s a legal requirement – if you have staff – is employers’ liability insurance (ELI). This can provide cover for any employees who are injured or suffer from an illness caused by working for your business.

ELI may not be legally required if you only employ immediate family members, though you may of course still want them to be covered.

But your shop is your livelihood, so it makes sense to consider other types of cover that could protect you against anything else that might affect your retail business.

There are many things that you may want to protect your shop against. For each form of risk, there’s a suitable form of cover. When taking out retail shop insurance, here are some common examples of cover you can include:

• Employers’ liability insurance: This could cover you if one of your employees becomes ill or is injured as a result of working for you. This is usually a legal requirement if you have staff.

• Public liability insurance: If someone is injured at your shop or their property is damaged, this could cover compensation and legal costs if a claim is made against you. With members of the public in your shop every day, this is particularly important.

• Business interruption insurance: This protects your business if you’re unable to trade for a period of time - for example, because of a fire or a flood.

• Buildings insurance: If you own the building where your shop is located, you’ll need buildings insurance. This usually covers the cost of repairs to a building’s structure, or even full rebuilding if needed.

• Contents insurance: This covers shelving, furnishings, computers, till systems and other business equipment you may have on the premises.

• Stock insurance: Your stock is what keeps you in business, so it’s important to have this cover to insure you against theft or damage.

• Personal accident cover: if you were injured in an accident and forced to close your shop, personal accident cover could compensate you for the loss of earnings.

Typically, you’ll need to pick the different cover options – including those listed – that need to go into your policy. You won’t be covered for those that you don’t include.

There are other things to watch out for depending on the nature of your business. For example, if you serve or sell food and drink you need to check that you are adequately covered if you make someone ill on site – but also if you are covered for off-site catering as needed.

Likewise, although glass is usually covered as standard, you may need to check to see if your shopfront is covered if your lease makes you responsible for any damage to it.

As always, check your documents and policy details carefully so you fully understand what you are and aren’t covered for. There are add-ons which you could consider to help deal with potential gaps.

Depending on your products or services, your location or way of doing business, you may want to consider some of these optional extras:

• Antiques, jewellery or electronic shops may need additional levels of cover with higher single-item limits.

• Takeaways and corner shops may need cover for cookers, fridges and freezers.

• If your shop sells alcohol, you may want loss of license insurance.

• If your shop makes deliveries, goods in transit insurance can protect items while they’re on the way to the customer.

• Cyber insurance can potentially cover you for risks such as data breaches of customer details or cyber-attacks on your computers or online store.

• Legal expenses cover could compensate you for legal expenses if a claim is made against your shop for damages, injury or illness.

• Stock not stored on the premises – if your shop is an online retailer or deals in stock which is stored offsite (eg: in a warehouse or industrial unit), this extra cover could insure that stock against theft or damage.

• Terrorism cover – if your shop is located in a high-risk area, this cover could compensate you for any damages sustained during a terrorist attack.

How much shop insurance you need depends on the type of shop you run. If you deal with large volumes of stock or specialise in particularly expensive products such as jewellery or electronics, you may need a higher cover limit. This will usually cost you more.

When considering the amount you should cover your stock for, calculate this using your cost amount, rather than the price you sell at retail. This may lower your cover limit, bringing the price of your policy down. But it should still provide you with enough cover to replace stolen or damaged goods.

It can be difficult to estimate your stock’s value but take the time to calculate this as carefully as possible. Underinsuring yourself would leave you with a potentially expensive problem if something were to go wrong. On the other hand, over-insuring yourself could see you pay for more cover than you need.

Yes. Even if your shop is run as a digital-only business, you’ll still face many of the same risks as a physical shop. You should treat your online business like a regular one, considering all the potential risks and appropriate cover.

As an online retailer, you’ll still have stock that is at risk of damage and theft. And you’ll still legally need employers' liability insurance if you’re responsible for any staff.

If something causes your business to close down for a period, business interruption insurance could also be useful.

And cyber insurance – to cover for risks such as data breaches or cyber-attacks – could likely be important too.

To get a quote, just tell us some information about yourself and the type of shop you run, including:

• How long you’ve been trading

• How many employees you have

• Your claims history

• Forecast turnover for the next year.

You’ll also be able to choose the elements of business insurance you want and tailor your quote to suit your needs. Once we have that info, we can send you a list of suitable shop insurance quotes to compare.