Retail insurance sounds like one product and behaves like four: the people who come through the door, the staff behind the counter, the stock and fit out inside, and the income the premises produces. Almost every argument after a retail claim is about one of the last two, because they are the sections where a figure had to be declared and usually was not revisited.
Liability, for customers and for staff
Public liability answers for a customer injured in the shop or for their property damaged there, and it is what a landlord or centre management will require in writing. Employers' liability answers for your own staff and is compulsory once anyone is employed, including seasonal and weekend cover. Product liability sits alongside them and matters more than retailers expect, because a shop that sells goods can be drawn into a claim about a defective product even where it did not make the thing.
Stock, and why the figure is the whole argument
Stock is declared as a sum insured and claims are settled against that declaration. A shop that declares an average figure and then suffers a fire in its busiest trading week can find the claim scaled back in proportion, because the policy was never asked to carry the peak. Insurers will usually accommodate a seasonal increase clause for exactly this reason. The same logic applies to the fit out, where shopfitting paid for by the tenant is frequently worth far more than the owner's mental estimate.
Business interruption, which most shops buy too short
If the unit is unusable, the rent, the rates and the wages continue while the trade stops. Business interruption pays that gap for a chosen indemnity period. Retailers habitually pick the shortest period on offer, and it is often the wrong call: the period has to cover finding and fitting an alternative unit or rebuilding the original, plus the time it takes for customers to come back to a reopened shop. Recovery of trade is slower than recovery of the building.
What changes when the shop also sells online
A shop with a website is running two businesses on one policy. Stock held for online orders may sit in a stockroom or a third party warehouse rather than on the shop floor, goods in transit becomes relevant once you are posting orders, and selling to customers outside the United Kingdom can take product liability outside the territorial limits printed in the schedule. None of it is difficult to insure; all of it is easy to forget to mention at renewal.
Questions people ask about retail insurance
Is retail insurance a single policy?
It is normally a package with several sections, or a commercial combined policy for larger retailers. Either way the cover is assembled from liability, material damage, stock, business interruption and money rather than being one indivisible product.
Does retail insurance cover shoplifting?
Theft by customers is treated differently from burglary and is often excluded or heavily limited, because it is a trading loss rather than a sudden event. Theft involving forcible entry is the loss the theft section is written around.
Do I need product liability if I only resell other people's goods?
It is still worth carrying. A retailer can be brought into a claim about a defective product, particularly where the maker is outside the United Kingdom or no longer trading, and the cost of defending that is exactly what the section funds.
Who insures the shop building, me or the landlord?
On a typical commercial lease the landlord insures the structure and recovers the premium through the service charge, and the tenant insures contents, stock, the fit out and liability. The tenant's own shopfitting is the item most often left uninsured by both sides.