Shop Insurance Explained: 8 Types of Retail Insurance

Shop insurance, also known as retail insurance, is an umbrella term for different types of insurance you might need or want for your shop, which can be bought together in one package. 

These different insurance types are designed to protect your physical store/stock, your customers, and your earnings. Some are a legal requirement, some are ‘nice to haves’, and some can be super specialised — e.g. freezer insurance. 

In this post, we’ll give you a brief overview of the eight types of shop insurance you might include in your package, and how much it might cost. 

On this page

• What does shop insurance cover?
• 8 Types of shop insurance
   
  1. Employers’ liability insurance
  2. Shop premise or building insurance 
  3. Business interruption insurance
  4. Stock/equipment/contents insurance 
  5. Public liability insurance
  6. Product liability insurance
  7. Professional indemnity insurance
  8. Personal accident insurance
     
     
• How much does shop insurance cost? 
• Final thoughts
• FAQs

But please remember, our posts are never a substitute for professional legal advice. Always double check with an expert if you’re unsure!

What does shop insurance cover? 

Your shop insurance package will be customisable depending on your business's individual needs, services, location, and many other factors. Shops come in many different shapes and sizes, after all! Below are some of the main types of insurance. 

8 Types of shop insurance

1. Employers’ liability insurance

🔍 A legal requirement if you work with employees, contractors, casual workers or temporary staff. 

Employers’ liability is a legal must-have unless you’re the only person who is involved in running your store. This insurance covers you if someone injures themself, or becomes unwell as a result of working for you, and makes a claim against your business. 

2. Shop premise or building insurance 

🔍 Not a legal requirement, but always recommended. If you rent your space, check with your landlord to see what’s already covered (most often, they should be covering the cost of this).

Premise insurance covers damage to your premises from incidents like floods and fire. If you don’t own your shop, check with your landlord to see what they have already covered with their insurance.

When looking at a premise insurance policy, drill down into what’s covered in terms of your shopfront (especially the glass, which is sometimes its own add-on) and the fixtures and fittings within. 

3. Business interruption insurance

🔍 Not a legal requirement, but always recommended.

Accidents happen — and so do pandemics. If your business needs to close for a period of time, your premise insurance will cover any damage/repairs to your property, and your business interruption insurance will cover your overheads, such as wages, during the period you’re unable to trade. 

4. Stock/equipment/contents insurance 

🔍 Not a legal requirement, but recommended if you hold stock or have valuable equipment. 

Sticking with the theme of damage to your property from fire, flood, theft etc is contents insurance. This comes under many names but covers the stock you hold (if any), and your equipment. Even if you don’t think the contents of your business is very valuable, it’s worth getting anyway — you can set a low estimated value of your contents, which will reduce your overall premium. 

Keep in mind that we’ve also seen building insurance included as an add-on within a ‘contents insurance’ policy — they’re not always treated as separate needs. 

💡 Top tip: Customise your contents insurance to reflect your business. There’s even such a thing as ‘freezer insurance’ if you hold a lot of frozen food!

5. Public liability insurance

🔍 Not a legal requirement, but always recommended. 

When a customer enters your premises, you become legally responsible for their welfare. If they injure themselves, or damage their property while in your store (and it’s deemed to be your fault), a claim can be raised against you. Public liability insurance is there to cover this cost (which, although unlikely, can be very high).  

6. Product liability insurance

🔍  Not a legal requirement, but recommended if you sell products or food.

Even if a customer is not on your premises, if they (or their property) are damaged by a product you have sold them, they can raise a claim against you. Food poisoning is a classic example, but not the only one. Product liability insurance covers the cost of any claims successfully raised against you for damage caused by faulty products. 

7. Professional indemnity insurance

🔍 Not a legal requirement, but recommended if you write reports, create plans or carry out inspections for clients. Anything where a mistake from you can result in a loss for them. 

Professional indemnity insurance is designed for ‘shops’ that sell services to clients such as planning, reporting, advising, and inspecting. If you make a mistake that costs your client money, or another type of ‘loss’, they may be able to make a claim against your business, and professional indemnity insurance covers the cost of this. 

8. Personal accident insurance 

🔍 Not a legal requirement, but always recommended.

We’ve covered your shop, your stock, your business, and any legal costs. Now the last thing left to cover is you. 

Suffering an accident as a business owner is a scary prospect. Personal accident insurance will typically cover loss to your business caused by your absence, regardless of whether your accident happened at work. 

How much does shop insurance cost? 

If that list of different types of shop insurance has you feeling a little faint, let us reassure you that the total cost of your shop insurance might be less than you think; it’s likely to be between around £400 and £550 a year for a small retail store or coffee shop. The exact cost is — like any insurance — entirely specific to the circumstances of what’s being insured, where, and for how much. 

Final thoughts

Shop insurance needn’t be overwhelming, so don’t be tempted to put off taking it out. Make use of price comparison websites to produce a plan that’s tailored to you, and remember to regularly review your policy and update your premiums as needed.

FAQs

Do I need retail/shop insurance? 

If you have a physical premises that customers enter, then yes, you’ll need shop insurance! Employers’ liability insurance may be the only type that’s legally required, but many of the others are highly recommended. 

Where can I get retail/shop insurance? 

Because shop insurance is so customisable and business-specific, we’d generally recommend using an insurance comparison website to find the right package for you. As with any service, always make sure you read the small print so you understand exactly what’s being covered — never assume!

What is shopkeeper insurance? 

Shopkeeper insurance is just another term for shop insurance, so all the information above applies. 

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