What type of insurance protection do I need for a retail store?
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Asked September 28, 2015
Retail stores require a bit more insurance than some types of small businesses. Not only do you have to protect against liability claims based on injuries or damages, you also need to protect against damages from your products, spoilage, and the possibility that your business could be temporarily shut down through no fault of your own.
General Liability is the primary type of insurance you will need. This covers you for injuries or damages that happen on your property, including any legal costs associated with damages or injuries. It is important that you have enough General Liability because it is what keeps you safe from large claims or lawsuits.
Business Interruption insurance is used to pay your bills if the business is not able to operate because of a covered peril. For example, if your store cannot operate because of a fire in the shopping center where it is located, your Business Interruption coverage would make up for your losses during the inconvenience.
A retail store also needs protection against faulty or spoiled inventory. For example, if a customer buys a pack of gum and falls ill because of it, this type of coverage would cover the loss. Similarly, it would also cover disposing of and replacing inventory that spoils through natural causes.
Any business is going to need workers compensation and other operational coverages. These coverages are written for you and your employees, and may not be required for all types of retail stores, especially if you only have 1 or 2 employees.
To simplify things, most insurance companies offer what is known as Business Owners Policy, or BOP. This combines all of the coverages needed for your specific type of business into a single policy. Since each BOP is tailored for a specific business, the exact details of the plan will vary from one business to the next.
Answered October 1, 2015 by Anonymous