What Type Of Insurance Do I Need In Retail?
Like any other business venture, starting a retail business requires various insurance coverages. Regardless of the retail business, insurance coverage may help shield your business against financial loss. Evaluating the risks associated with your retail business may help you figure out the type of insurance you need the most. While it is not advisable to leave anything to chance, some insurance types are critical and should be in effect from the first day of operations. Ultimately, choosing the right insurance type for your retail business puts you in a good financial position even when risks occur.
Ideally, your retail business insurance should cover the following risks:
- Property and merchandise damage.
- Employee injury.
- Customer injury.
- Financial losses due to criminal activity.
- Reputational damage.
- Financial costs associated with lawsuits.
Types of Insurance For Your Retail Business
General Liability Insurance
General liability insurance is the fundamental insurance type for any retail business. It helps retail business owners handle liability claims made against their business for injuries or property damage. Generally, this type of insurance provides defense and damages where a third party suffers (or allegedly suffers) bodily harm or property damage due to employee action or use of your products or services.
Business Property Insurance
It is also known as commercial property insurance and covers any damage to the business premises itself or any other business property such as office equipment, tools, merchandise. Business property insurance helps protect you in the event of a fire, theft, vandalism, or a natural catastrophe such as a tornado.
Workers' compensation is a type of insurance that covers employees injured while on the clock. It covers any medical bills and wages lost for such employees who are injured while working. State laws provide that all businesses or employers should have workers' compensation insurance for their W2 employees. In the event of injury, the employee is compensated under this insurance and he or she gives up the right to sue the employer for the injuries. Besides covering employees, workers' compensation insurance covers you and your business against any legal complications.
Business Owner's Policy (BOP)
BOP is a collection of insurance policies that offers coverage for additional risks associated with specific business operations. This type of insurance may include business interruption insurance, business crime insurance, business vehicle insurance, or property insurance. The insurance types to be included in your BOP can be altered depending on your retail business's needs. Retail business owners may favor a BOP as it often costs less than the total of individual coverages.
Business Crime Insurance
Retail business owners may find this insurance essential as it is one of the common ways to lose money. It, therefore, helps cover them against major income setbacks. Depending on the policy they choose, business crime insurance can help shield retail business owners against losses that arise from:
- Employee dishonesty
- Hacking of payment system, such as debit cards
Professional Liability Insurance
It is also known as errors and omissions insurance and protects the business where it fails or renders services inappropriately. It is essential that retail business owners consider this type of insurance since the general liability insurance doesn't provide coverage for errors and omissions. Professional liability insurance is particularly important to service-oriented retail businesses such as beauty parlors.
Commercial Auto Insurance
Some retail business owners may have vans or other vehicles used for business purposes, such as delivering products or movement of workers. Commercial auto insurance, therefore, helps insure business vehicles against any auto accident. Where employees use their cars for business operations, it is important for the retail business owner to have non-owned auto insurance to protect the business if the employee isn't adequately covered. However, non-owned auto insurance can often be included in a BOP policy.
Signage used by the retail business to advertise or educate the public may be pretty expensive, especially for digital signage. Any damage to such signage could mean a huge financial setback for the retail business., and this insurance helps the business replace the signage after a fire, vandalism, or damage due to extreme weather conditions.
Retail businesses are built upon huge financial and time investment, and, protecting them should be a no-brainer for their owners. Various types of retail insurance cover business owners against various risks, which puts them in a good financial position even when the risks occur. Proper assessment and consideration are therefore vital to determining the right type of insurance for their business.