Retail Industry Insurance

Mandatory insurance

In some provinces, certain types of insurance, such as employers’ liability or automobile insurance for business vehicles, may be mandatory.

Bundling policies

Retailers may be able to bundle several types of coverage (like property, general liability, and business interruption) for a discount.

Review regularly

Insurance needs may evolve, so it’s important to review and adjust policies regularly based on business growth or changes in risk factors.

Retail business insurance considerations: retail store vs. online retail business

When selecting a commercial insurance policy for your retail business, you will need to make several considerations. One of the biggest distinctions between retail businesses is whether you operate a physical store or an e-commerce store only. This can dramatically impact the type of coverage you need. To help you understand which type of coverage is right for you, we break down a few things you will need to consider if you own a retail store or an e-commerce store:

Retail business insurance coverage for owners of retail stores

Retail business owners who operate a physical retail store, whether they rent or own it, will need to make sure they have coverage to protect themselves against liability claims and their physical property. As mentioned above, commercial property insurance is the main type of insurance coverage that can protect retail businesses from property damage. For example, under this type of coverage, if a fire broke out at one of your brick and mortar locations, your insurer would reimburse you for the cost of any repairs, as well as the cost of replacing any lost inventory (so long as fire was a named peril in your policy). Adding business interruption coverage to your commercial property insurance coverage may also be especially important for retail businesses with physical stores as if your store is the main way you sell products and it is forced to close temporarily due to damage, you could be out a lot of money. But with business interruption insurance, your insurer may reimburse you for this lost income.

Meanwhile, you would need commercial general liability insurance to protect you from third party claims arising from customers who visit your store. For example, if a customer visited your retail store but fell and injured themselves on the icy pathway leading to your front door, they could sue you for bodily injury. Without CGL, you may be forced to pay for an expensive lawsuit out of pocket, which could hurt the finances of your business. But with CGL, your insurer would step in and cover costs like legal fees, medical bills, and more. Note that cyber insurance will also be important for owners of retail stores as chances are, your store uses a POS system to store the financial and personal information of customers. Since you have a legal obligation to protect the sensitive customer data you store, cyber liability insurance will be important in the event of a cyber hack or other online security breach. Overall, the following types of coverage are recommended for retail businesses with retail stores:

• Commercial general liability insurance
• Commercial property insurance
• Business interruption insurance
• Product liability insurance
• Cyber liability insurance

Retail business insurance coverage for online and e-commerce retail businesses

The types of insurance coverage that are important for online and e-commerce retail businesses are similar to that of those with retail stores, with a few key distinctions. Both types of retail businesses will benefit from commercial property insurance and commercial general liability insurance. These are staples of almost any commercial insurance policy. However, while cyber liability insurance is important for retail businesses with brick and mortar stores too, it might even be more important for online businesses. Why? Online retail businesses are even more vulnerable to data breaches or cyber attacks, which makes cyber liability insurance a must. The reality is that any customer who is browsing or entering their personal details on your retail business’s website expects their data to be secure and protected. If something occurs and their information is lost, your business could be in big trouble. But with cyber insurance, your insurance company would help cover the costs associated with an attack, which could make a huge difference.

Further, product liability insurance is also wise for online retail businesses, especially if you are not seeing the items you sell before shipping them out to customers. Product liability coverage offers financial protection in the event that a product you sell to a customer causes bodily harm or property damage, and they sue you. For example, if you sell specialty energy drinks and a customer buys one, drinks it, and has an allergic reaction, they could file a lawsuit against you. Luckily, product liability coverage would protect you.

At the end of the day, the following types of coverage are suggested for online or e-commerce retail businesses:

• Commercial general liability insurance
• Commercial property insurance
• Product liability insurance
• Cyber liability insurance