Shop insurance is a package built around one hard question: what would it cost to replace everything in here tomorrow. The liability sections are standard and inexpensive; the property sections carry the money, and the figure a retailer puts in the stock and contents boxes decides how much of a claim is actually paid. Getting that number right is most of the work of buying the policy.
The package, section by section
Public liability for customers in the shop, employers' liability for staff, and product liability for what you sell. On the property side, contents and shop fittings, stock, glass which is a routine claim on a retail frontage, money and often a business interruption section. Buildings cover belongs to whoever owns the premises, which for most independent retailers is the landlord, and the lease says who insures what.
Stock, and why the number moves
Retail stock is not a constant. A shop that holds four times its normal stock in the weeks before Christmas and insures for its average is underinsured at exactly the moment a loss would hurt most. Insurers deal with this through a seasonal increase clause, commonly a stated uplift for a stated period, and it usually has to be asked for rather than assumed. The same applies to a new range or a bulk purchase.
Underinsurance, and the way it reduces a small claim
If the sum insured is materially less than the real replacement cost, the settlement can be reduced in the same proportion, and that applies to a partial loss as well as a total one. A retailer insured at half the true value who loses ten thousand pounds of stock to a flood can find the settlement halved, on a claim that was nowhere near the policy limit. This is the single most common disappointment in retail insurance and it is entirely avoidable.
The conditions that come with a shop
Policies carry security conditions: the locks specified, the alarm set, the shutters down, sometimes a stated level of protection for high value stock kept overnight. There will be conditions about leaving the premises unoccupied for a period, which matter to seasonal businesses. Read them against how the shop is actually run rather than how it was described at quote.
Questions people ask about shop insurance
What does shop insurance cover?
Public liability for customers, employers' liability for staff, product liability for goods sold, and the property sections: contents and fittings, stock, glass, money and usually business interruption. Buildings cover sits with whoever owns the premises under the lease.
How much stock cover does a shop need?
Enough to replace the stock at its highest normal level, not its average. Ask about a seasonal increase clause if you hold much more stock at certain times of the year, because insuring for the average leaves you short exactly when a loss would be largest.
What is underinsurance and why does it matter?
It is insuring for less than the true replacement cost. Where it is material the insurer can reduce the settlement in proportion, including on partial claims, so a shop insured at half value can have a modest claim halved.
Is glass cover included in shop insurance?
It is a standard section in most retail packages and it is one of the claims retailers actually make, because a shop front is fragile and exposed. Check the limit and whether it includes signage, lettering and any specialist glazing.