What cover is provided under a retail insurance policy?
Whether a business is trading as a traditional high street shop or solely online, they’ll retail insurance.
Whilst the business models are different, their insurance requirements are similar.
Although most UK business insurance companies provide their own branded and designed policies, the cover provided is much the same. We’ll detail below some of the sections, in a typical policy, with a brief description. These notes are describing a retail insurance package. Packaged insurance policies contain the covers typically needed by the trade group they’re aimed at. Bespoke policies, such as commercial combined insurance, can be provided as well, usually for larger or specialist risks. However, most shops in the United Kingdom, will arrange cover through the purchase of a retail insurance policy.
Structure or Building
If the business owns the property they trade from, they can include this cover in the Structure or Buildings section. This can include window and door glass or there may be a separate section of cover.
This section can also include cover for Tenants Improvements. This is where a shop business leases a building, but pays for improvements which are permanently fitted to the building. The landlord does not own these, so will not insure them. Tenant’s improvements are not usually removed, if you leave the premises. Typical items are:-
- Fitted flooring ie laminate
- New wiring
- Fitted lighting
- Partition walls
- Air conditioning systems
- Fitted kitchen
If the shop has a full insuring and repairing lease, they can insure the building, even though they do not own it. This is something you really need to discuss separately with your business insurance broker
This can include a range of items, depending on the insurer. Contents can extend to include business equipment, machinery, plant, computer equipment and stock. Cover normally applies to these items whilst at the insured risk address only (see later for portable equipment).
This section of cover results in some of the most complex claims. Let’s consider a shop that suffers damage from a burst water pipe. Emergency and subsequent repairs and replacement to buildings and contents are covered under the above two sections. The business will probably be interrupted, either short or long term, as a result of this damage. It may be a minor interruption or involve prolonged closure. This is where business interruption cover comes into play. It is intended to recompense the shop owner for reductions in their profit.
Claims are complex as there is a need to identify, or estimate, what the profit reduction is. Most business insurance companies will appoint a loss adjuster to investigate larger business interruption losses.
Employers, Public and Product liability
These are the usual liability insurance covers available to most businesses. These are explained here.
The majority of break-ins and robberies will, understandably, target money. Each insurer will have a variety of different limits and levels of cover.
Goods in Transit
A lot of shops will use their own business vehicle(s) to transport stock. This can be from suppliers or to customers. Most business car and van insurance policies do not include business contents. This section covers theft of these items or damage to them during a motor accident.
Nowadays, most shops will use portable electronic equipment. Items such s laptops and smartphones are commonplace. If this equipment is taken out of the shop, it is more susceptible to damage. Insurers charge a premium for this cover and there may be conditions applying. For example, theft might only be covered from a locked vehicle from 6am to 9pm.
Commercial legal expenses
Liability insurance claims will include the cost of solicitors, for example. Commercial legal expenses insurance includes other items, such as employment tribunal or Inland Revenue investigation costs.
Using a business insurance broker
We’ve included details on the main sections of cover. There are sites that offer to compare retail insurance. It is wrong to assume that a policy bought online provides all the cover you need. The best thing to do, is have a discussion with an independent business insurance broker. They’ll review and agree your insurance needs and offer you a suitable product.