Shop insurance for centre owners
Nearly every town or city in the UK has at least one shopping centre. There are over 250 in the ten largest cities, from London, to Liverpool and Glasgow. Within these centres, most shops have very similar business insurance requirements. The shopping centres are usually owned by a commercial landlord or local authority. There will be a separate commercial property insurance policy, for the structure. This policy will also extend to include property owners liability, for people visiting the centre. This cover is the same as public liability insurance. The centre will have set responsibilities. This will cover areas such as car parks, pathways and walkways around the centre. Once a visitor, or shopper, enters a shop, there is a shared public liability risk.
Public liability insurance
If they are injured, in a shop, due to a fault in the building, for example a falling light fixture, this will usually fall on the centre owners liability insurance. However, the retailer may have undertaken their own refit of the shop. If the damage is caused by something they have installed, the claim is dealt with differently. In this scenario, it will either be the retailers or their shop fitters policy where the claim will lie. This would also include slips, trips and falls due to loose flooring. The retailers insurance policy will be relied on for claims where they’re responsible for the installation and maintenance of the contents. As with most liability insurance claims, negligence will need to be proven.
The good news is that most shop insurance policies automatically include public liability. It is important to look at the limit of liability though. Many of the larger shopping centres insist on their tenants having certain levels of cover. The minimum is usually £10,000,000 for public liability. Most shop insurance package policies provide cover at a limit of £2,000,000 or £5,000,000.
To provide cover at the limit that is required, will usually involve the purchase of a separate or top-up cover. Most UK business insurance companies will only provide up to £5,000,000 public liability. The reason for this, is that they do not want to have the risk of a, potential, £10,000,000 claim. Liability insurance claims costs are increasing year on year. Whilst £10,000,000 is a huge figure, there is still the likelihood of one claim at this amount.
Excess of loss insurance
Instead of one single insurer taking this risk in its entirety, the risk is shared. Insurer A provides the shop insurance package policy, which includes public liability at £5,000,000. Insurer B provides a top up policy, for the additional £5,000,000. These top up policies are known as excess of loss insurance. The likelihood of insurer B having to pay out, is low. Therefore, the premiums charged for these top up covers are low as well.
For a retailer, operating a single site, they may look to pay around £500-£1,000 for their shop insurance package policy. If they need to get an additional liability cover, this would be around £550, in the current market.
The premium charged for excess of loss insurance depends on the trade, location, turnover and premium payable on the ‘base’ policy. The premium range can be quite high. It is definitely worth speaking to an independent business insurance broker, who’ll be able to secure a range of quotes.
Compared to a single high street location policy, public liability is the only major difference in cover. As we’ve mentioned above, speaking to a broker is the best way to obtain a competitive premium, for the right cover.
Clark Thomson are one of the UK’s largest independent insurance brokers. Please visit us if you’re looking for shop insurance quote or just need some advice.