Like most other types of business ventures, opening a retail store will require a variety of insurance coverages. Retail store owners should evaluate insurance needs during pre-opening planning so that these coverages are in effect on the first day of business. Some issues that need to be addressed are worker's compensation insurance, liability coverage, theft, fire and disaster policies, mechanical breakdown coverage and business vehicle insurance.
As part of a business owner's policy (BOP), property insurance provides coverage for the real estate owned by the business. For business owners who rent or lease, property insurance provides coverage for improvements to the space. This coverage also protects business inventory, furniture, fixtures and other business property.
Mechanical Breakdown Insurance
This type of insurance provides coverage in the event of breakdown of any mechanical system that causes damage to the store or contents. This can include air conditioning or heating systems, refrigeration, humidifiers or water filtration systems.
For most retail stores, liability insurance coverage is one of the most important parts of a BOP. Liability coverage helps protect the business owner from financial liability for injuries or death of customers. This protection is limited to the policy limits and restrictions.
Worker's Compensation Insurance
Depending on location, a retail store may be required to carry worker's compensation insurance for their employees. Each state dictates specific criteria and coverage for retail businesses within their jurisdiction.
Disaster coverage can protect a retail store against loss due to fire, flood, hurricanes, tornadoes or other major disasters. This coverage can help rebuild or relocate the store, as well as help rebuild inventory and replace fixtures.
Adding theft insurance coverage to a BOP will help protect the business owner against loss due to shoplifting, employee theft or robbery. This coverage typically covers inventory, but can be extended to cover computers, cash registers and other items.
Business Vehicle Insurance
For retail stores that offer delivery services or utilize a vehicle for other purposes, business vehicle insurance may be required. This coverage will protect against loss due to a wreck, limit liability and provide a replacement or rental for a total loss.