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Shop insurance can protect your business from the various hazards or claims you might encounter. These risks include damage to the property from your customers or employees and theft of stock. This insurance can also provide cover if you have to close the shop due to flooding or if you're facing a claim from a customer about an item you’ve sold them. 

It’s important to find insurance for shops that is tailored to your business, as this will make sure you can continue to trade. 

It’s worth knowing that if you employ any temporary or permanent staff (other than immediate family) it’s a legal requirement to have employers’ liability insurance. If an employee falls ill or is injured in the workplace this insurance ensures you’re covered. 

The other types of insurance aren’t legal requirements, but some will be important to consider if you want to protect your business. 

Shop insurance works by protecting your business if something goes wrong. 

With retail insurance in place, you can claim for compensation if your business suffers from loss or damage. This is important because if the worst happens it can be very costly to your business. 

For example, if stock is damaged or goes missing from your shop, you can make a claim to your insurance provider for compensation. You'll need to give details of what's happened so it can be assessed, and should be prepared to hand over stock purchase price details. You'll then find out what compensation can be offered.

You’ll know your business inside out, so you should be aware of any potential risks that may face your shop. If you don’t want to be kicking yourself because you ignored a potential risk, then retail insurance is a good idea. 

The key is to make sure you get insurance that is tailored to your shop and its needs, as this will be the most effective. For example, it would make sense if your shop sells portable items that are desirable to thieves, as is the case with many high-street outlets. 

The sharp rise in cases of shoplifting has been well publicised, with the Office for National Statistics reporting a 22% increase in shoplifting incidents. With shop insurance you would incur less of a financial hit should your outlet get targeted.

The cost of shop insurance will vary depending on the logistics of your business. For example, the cost will take into account: 

• The size of your shop

• The value of your stock

• Its location

• The number of staff

• Whether you have any licensing requirements 

Most shop insurance starts at around £13 a month, but the price can vary quite a bit – with factors such as the covers you choose, your location, employee count and turnover affecting how much you’ll pay.

Here are some real-life examples of quotes for shop insurance:

There’s no one-size-fits-all retail insurance because different types and sizes of shops will vary in what they need protecting. 

Large stores are more likely to employ lots of staff – who could get injured onsite. They will also usually have a high customer footfall, and a higher turnover than small outlets. All of these factors add to the level of risk to the insurer, which is reflected in the premium. 

Location also has a role to play. If you work in an area with a lot of crime, you can expect the cover to cost more than if you were based in a village with minimal crime. This is because your business is seen as being a higher risk. For example, if you’re burgled, you might need to claim for loss of stock and for business interruption during the period you were closed to customers. If you are based in a crime hot-spot, you’re more likely to be repeatedly burgled. 

Likewise, if your business is located on a flood plain rather than on higher ground, your risk of making a claim for loss of stock due to water damage is greater.

All these elements will reveal themselves not just in the quote, but also in limits of cover and the excesses you would need to pay if you claimed on the policy.