Learn About Retail Insurance

The average monthly cost of retail insurance coverage is $183 across 12 companies and multiple policy types, according to quoted premium data from Insureon. Retail businesses that just need a general liability policy pay an average of $66 monthly, according to quoted premium data from Insureon.

Your business insurance premium will depend on factors like the coverage types and limits you choose, the number of employees you have, your location, and your prior claims history. In addition to average cost, we’ll cover some of the top companies offering retail business insurance and how to save money, so you can find an affordable policy that meets your needs.

Average Cost of Retail Insurance

The average quoted premiums below were collected over seven months on leading commercial insurance marketplace Insureon. The typical general liability limits were $1 million per incident and $2 million aggregate.

While it’s important to consider your budget when purchasing retail store insurance, the company offering the cheapest premium may not meet your needs. Ensure you choose a policy that doesn’t leave you with coverage gaps. Further, you’ll want to evaluate the financial strength and customer satisfaction ratings for each retail insurance company before making a choice.

Factors Influencing Cost

The cost of insurance for retail businesses varies not only based on the coverage types and limits you choose, but also individual factors that insurers assess when determining the risk to insure your business.

General Liability

General liability insurance reimburses you for the cost of a lawsuit against your business if someone claims your business is liable for causing an injury or damaging property. It also covers personal and advertising injury—for example, if someone claims your advertising is misleading, general liability would cover the cost of your defense and any judgments. Premiums vary based on the following factors:

The condition, size, and location of your business premises
The type of business you conduct
How many years you’ve been in business
How many employees you have
Your annual revenue
Your claims history

Business Owner’s Policy

Some retail shop owners may prefer to get their general liability and commercial property insurance in one convenient package, known as a “business owner’s policy” (BOP). In addition to general liability, a BOP covers damage to your business premises and its contents, and may also help replace lost income if your retail store needs to close after a covered event like a fire. In addition to the factors listed above, BOP premiums are determined by:

The value of your building and its contents
The location of your business premises, which affects the likelihood of theft, vandalism, and other potentially damaging events
Whether you choose replacement cost or actual cash value reimbursement
Whether you add endorsements to the policy

Commercial Auto Insurance

If your business owns and operates vehicles, by law you’ll need commercial auto insurance (if you or your employees drive personal vehicles for business purposes, you may need hired and non-owned auto coverage instead). Commercial auto insurance provides physical damage and liability coverage for your business vehicles. Factors influencing your commercial auto premium include:

The deductible and policy limits you select
Which optional coverages you buy
The number and type of vehicles your business owns
How often you and your employees drive
The driving records for you and your employees
Your prior claims history

Workers’ Compensation

Most states require that businesses with a certain number of employees carry workers’ compensation insurance—Alabama requires it for businesses with at least four employees, for example. The coverage pays for medical bills and lost wages after an employee becomes ill or injured while performing their job duties. It also typically protects your business from employee lawsuits. Workers’ compensation premiums depend on the following factors:

Where your employees work
The number of employees you have and their roles
Your annual payroll
Your history of workers’ compensation claims

How to Save Money on Retail Insurance

Compare quotes: You may find that insurance companies offer vastly different rates for the same coverage. Narrow down your options to well-rated companies that offer the coverage you need, and then go with the cheapest quote.
Pick a high deductible: Some insurers may offer you a choice of deductible. If you pick a higher deductible, you’ll reduce your premiums. Just be prepared with cash reserves in the event of a claim, since you’ll be responsible for covering your deductible.
Bundle your policies: If you need both liability and property insurance, a BOP may save you money when compared to buying the policies separately. Some insurers also offer discounts when you buy more than one type of coverage.
Work to prevent losses: Some insurers may reduce your premiums if you require your employees to undergo safety training or take other measures to reduce your risk. Avoiding claims will help keep your premiums as low as possible, too.

What Is Retail Insurance?

Retail insurance broadly refers to business insurance policies for retail stores, which may include general liability, commercial property, workers’ compensation, and commercial auto insurance. Retail insurance protects retail businesses against a wide variety of risks that could result in financial losses.

What Does Retail Insurance Cover?

A general liability insurance policy for retail stores helps reimburse you for legal costs and judgments if someone claims your business is liable for their injuries or damage to their property. It also covers personal and advertising injuries. Retail shops may also need other coverages, such as commercial property insurance, which helps cover damage to your business premises and its contents, and workers’ compensation, which pays for medical bills and lost wages after an employee injury or illness that results from their job duties.

What Kind of Insurance Does a Retail Store Need?

Most retail stores should have general liability insurance and commercial property insurance, which can be purchased in a package known as a “business owner’s policy” (BOP). Retail businesses that have employees will also need workers’ comp insurance, and those that own and operate vehicles will need commercial auto. E-commerce retail businesses may also need cyber insurance.

What’s the Best Kind of Policy for Retail Stores?

Business owner’s policies offer most coverages retail shops require in a convenient package, but retail businesses that have employees may need workers’ compensation coverage as well. The best policy for you will depend on the needs of your business.

Do I Need Retail Business Insurance?

If your retail business has employees, you’ll likely need workers’ compensation insurance by law.

If your business owns and operates vehicles, you’ll legally need commercial auto coverage in most states.

Some states and municipalities may require additional coverage before you can get a business license. Even if it’s not required, retail shops should have general liability and commercial property insurance to protect their business finances, too.

Author: Lindsay Frankel

Retrieved from: investopedia

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