Retail Ready: What Every Small Retail Outlet Owner Needs to Know About Insurance

Small businesses have regularly been victims of numerous mishaps, including thefts, burglaries, and shoplifting. Even with all safety precautions in place, it is estimated that businesses lose more than $61 billion per year due to shoplifting and employee theft. This has given rise to retail shrink, which is the philosophy of adopting measures to reduce such crimes, making retail shrink a $100 billion industry problem.

Furthermore, ORC or organized retail crime incidents rose by 26.5% in 2021. Because sales are increasingly moving online, there is an increased risk of cybercrime as well. Over 43% of respondents said they had experienced slightly more cybercrime, while over 15.5% said they had experienced significantly more. However, each threat can be mitigated with the appropriate insurance policy and add-ons, as they can provide a comprehensive protection model for a small retail outlet.

All The Insurance a Small Retail Business Needs

Crime Insurance

Many crimes can transpire in a retail store, including theft, burglary, robbery, shoplifting, and fraud. Because these crimes can be committed both online and in physical stores, retail business owners must protect their establishments from them. Crime insurance is an excellent option because it provides financial assistance to businesses in such situations. This includes legal costs, revenue loss recovery, and lost business recovery, among others.

Depending on the nature of the business, the premium for crime insurance can range from a few hundred dollars to thousands of dollars. For example, a well-known brand or a gemstone business may be required to pay higher premiums due to the risk factor involved and the likelihood of robbery. However, other factors such as location, coverage required, and so on are considered before deciding on the best crime insurance coverage plan.

Commercial Property Insurance

A retail store must purchase commercial property insurance to protect its property, appliances, furniture, and inventory. Damage to retail store property can occur due to fire or theft, resulting in financial loss or, in the worst-case scenario, business suspension. Commercial property insurance is an excellent way to recover by both compensating for the loss and assisting in the reconstruction of the same status.

The premium for commercial property insurance is heavily influenced by the property’s location and the types of risks involved, such as employee count, prior criminal history, and so on. If your property is in good condition and has most of the safety nets in place, your premium rates will undoubtedly be lower.

General Liability Insurance

Liability insurance is a huge help to any business owner because unexpected accidents are far more likely to occur when visitors come in frequently. When it comes to retail stores, there are chances of people getting injured while visiting the store for any unknown reason. This makes the company liable for the losses incurred by the individual. Workers may be subject to similar circumstances if injured while performing a routine task in an unsafe work environment. 

The insurance policy protects the company from any legal claims made by any other brand on the commercial front. If any sentimental values are harmed, claims can be filed against the company, and this insurance policy can then come to the rescue.

The cost of general liability insurance is determined by a variety of factors, including location, claim history, business type, and risk factors, to name a few. These factors influence the policy’s premium and the extent to which such incidents are covered.

Business Interruption Insurance

During the pandemic, over 12,000 stores in the United States closed, shaking the entire retail industry. A business can cease operations for a variety of reasons, including a global pandemic or an ongoing recession. As a result, a policy like business interruption insurance is an excellent way to stay ahead of the game. This policy keeps the boat sailing even in bad weather as any temporary stoppage or operational limit can be offset by this insurance. Businesses benefit by getting aid in lost revenue, employee protection, business reinstallation, and other aspects after a temporary shutdown.

The premium for such an insurance policy may be somewhat high because it provides a significant benefit when the time comes. To be on the bright side of things, a clear and careful evaluation is required. Other factors such as market potential, risk factors, location, employee size, business operation size, and so on all contribute to the overall premium that must be paid for this type of policy.

Commercial Auto Insurance

The retail industry is also closely linked to the logistics industry to move inventory from one location to another. Keeping this in mind, commercial auto insurance is essential for avoiding legal claims in the event of an accident or bodily/property damage. The insurance also covers any theft or damage to the company’s delivery vehicles or other modes of transportation, as well as any legal fees incurred as a result of any claim or judicial case filed.

The top priorities for determining this insurance’s premium are location, driver history, and previous claims. The company can choose between group and individual insurance for their commercial vehicles based on which is more profitable. Ideally, maintaining a clean track record is the best way to get a great deal on the premium.

Looking for an ideal and tailored policy for your retail establishment? For years, Gonzalez Insurance has worked with many retail business owners to solve their insurance problems. Our insurance experts can provide you with a customized quote after a thorough risk assessment. Contact us today.