Shop and retail insurance

If you are a UK business and you have any non-family members working for you then by law you must have employers' liability insurance.

Without it, you can be fined up to £2,500 for every day you're not insured^{^}

If anyone who works for you becomes ill or injured because of their job you could be responsible for the associated costs, including expensive compensation claims.

Employers' liability insurance covers harm caused to employees, contractors, volunteers and anyone else doing any work for you. It's also a legal requirement.

You can be taken to court if a client or a member of the public believes they have been physically or financially harmed because of your company's business activities, including if their property is damaged.

Retail businesses face risks of customer injury or property damage, from slips on wet floors to damaged merchandise,

Public liability insurance would cover legal fees and compensation if a customer successfully sues due to an incident on your premises.

Income protection insurance can replace your salary if you have to take time off work for ill health, so you don't have to worry about paying your bills or maintaining the lifestyle of your family.

Insurance can cover the cost of replacing or repairing your stock and equipment if they are damaged or stolen, ensuring your business can continue operating.

If your shop is forced to close due to unforeseen circumstances, such as fire or flood, business interruption insurance can cover lost income and expenses, helping you stay afloat until you can reopen.

Shop insurance does not normally cover cash as standard. Business contents insurance will cover furniture and displays and stock insurance will cover your stock, but neither of these policies will cover any cash that you keep on the premises.

If you do keep cash in your shop and want to protect it, there are some specialist insurance policies that will cover it. However, these policies have limits to how much they cover as well as some strict terms. These policies will require you to secure any cash in a locked safe overnight or move it to a separate, secure location outside of business hours. They also won't typically cover theft of cash during business hours and may not cover theft at all unless there are obvious signs of forced entry.

Yes, even if your business runs through an online shop, you’ll probably still need much of the same cover as with a physical shop – including policies for your stock or product liability. However other useful cover could be included in your home insurance policy. There are also various business insurance policies designed cover you if you use your home as an office.

Another area to consider for online businesses is cyber-insurance, which can protect you against the cost of:

• Liability, as cybersecurity breaches can often lead to fines and lawsuits

• Public relations, because you may need to invest in repairing your business’s public image

• Security services, as you might need to upgrade your security system to handle a future attack

How much cover you need depends on your individual business.

When you add any of these policies to your cover, you might be able to specify the level of coverage you require. For example you’ll usually be able to insure your stock up to a certain value, but the more cover you add the higher your premiums are likely to be.

If you are insuring your stock, you should generally insure it at cost price rather than its retail price – the latter is often higher, and your insurer might see this as you overvaluing the items, which could invalidate your claim.

If you own buildings insurance and run an online shop, then your building insurance will cover damages to the building itself, including your home office. However, standard contents insurance doesn't normally cover equipment that belongs to your business if it's kept in your home. This includes office equipment as well as any stock that you keep in your home. You will still need special business insurance to cover items that belong to your business, even if you store them at home.

Some types of businesses might require types of cover that aren’t included as standard, or may not be widely available. For example, if your shop deals mostly with food you might find cover is more expensive if you use certain equipment such as deep fat fryers.

The same could apply if you sell high-value items like jewellery or art – you’ll likely need to pay more for cover or take out a policy specially designed for your circumstances.

Some shops also require a licence to sell certain goods. Pubs, clubs, theatres and supermarkets need a licence to sell alcohol, and if they lose that licence their business could take a hit. Loss-of-licence cover can protect you against lost income and the depreciation of the value of your business.

If you transport goods, you might need a goods-in-transit policy, which usually comes with a commercial van insurance policy.