Shop Insurance
Shop insurance is a package built around a simple fact: a retail business has most of its value sitting in stock and fittings, behind a large pane of glass, in a building the public is invited to walk into. Every section of the policy follows from one of those three things.
What A Shop Policy Covers
The covers themselves are not exotic. Stock and contents against fire, flood, theft and damage. The shopfront, which is usually the most frequently claimed item on the whole policy. Money on the premises and in transit. Public liability for customers, employers' liability for staff, and business interruption for the weeks you cannot trade.
What separates a good retail policy from a cheap one is almost always the sums insured and the conditions attached to them, not the list of sections.
What Shop Insurance Covers
Stock
Your goods against fire, theft, flood and accidental damage. Usually the largest sum insured on the policy, and the one most often set at an average rather than a peak.
Contents, fixtures and fittings
Shelving, counters, refrigeration, tills and the fit out itself. Where you hold the lease, the tenant's improvements are typically yours to insure rather than the landlord's.
Shopfront and glass
Fixed glass, usually including the cost of boarding up and replacing signage and frames. The most frequently claimed section in retail, and often available on a full replacement basis without affecting the main claims record.
Money and assault
Cash on the premises in and out of hours, in transit to the bank, and at a director's home. Nearly always comes with personal assault cover for staff involved in a robbery.
Business interruption
Loss of gross profit while you cannot trade after an insured loss, plus the cost of trading from somewhere else. Set the indemnity period on how long a full refit would realistically take.
Public and employers' liability
Claims from customers injured on the premises and from staff injured at work. Employers' liability is compulsory the moment you have anybody working for you.
Where The Cover Stops
Wordings differ between insurers, so treat these as the usual position rather than as universal fact. Where one of them matters to you, it is worth checking on your own schedule before you need to.
Underinsured stock at peak
Sums insured are usually set on an average stock holding. If you hold three times as much in the run up to Christmas and the fire happens in December, most insurers apply average and reduce the settlement proportionally. Declare the peak, or ask for a seasonal increase clause.
Unattended money and unlocked safes
Money cover carries limits for cash in and out of business hours, and conditions about safes and night deposits. Exceeding the out of hours limit is the usual reason a money claim pays less than expected.
Theft without forcible entry
Most policies require visible force to gain entry. Shoplifting, walk in theft and losses caused by staff usually fall outside the theft section, though employee dishonesty can often be added.
Minimum security requirements
Locks, alarms and shutters specified on the schedule are conditions, not suggestions. An alarm that was not set, or a lock that was changed for a different specification, is enough to decline a theft claim.
The Shopfront Is The Claim You Will Actually Make
Across retail accounts, glass is the section that moves most often. A vehicle reversing into a frontage, a break in through the display window, a cracked pane after a cold snap. The sums are rarely catastrophic and the frequency is high.
Two things are worth getting right. First, check whether the cover includes the frame, the signage and the cost of boarding up overnight, because the glass itself is often the cheapest part of the job. Second, check whether glass claims are recorded separately from the main policy claims experience. On many retail wordings they are, which means a cracked window does not sit on your record and inflate the renewal the way a theft claim would.
Where the lease makes you responsible for the glass, that obligation sits with you regardless of what the landlord's buildings policy says, and tenants frequently assume otherwise.
Sums Insured Are Where Retail Policies Fail
Nearly every disappointing retail claim we see traces back to a sum insured rather than to a wording. Stock declared at the figure from three years ago. A fit out insured at what it cost rather than what replacing it would cost today. A business interruption indemnity period of twelve months on a unit that would take eighteen months to rebuild and refit.
The condition of average is the mechanism. If you insure stock for £40,000 and the real value at the time of the loss is £80,000, the insurer can treat you as your own insurer for half and settle a £20,000 fire at £10,000. It applies to partial losses, which is to say almost all of them.
Rebuilding and refitting costs have moved sharply over the last few years. A sum insured that was right in 2022 is unlikely to be right now, and reviewing it takes an afternoon.
Cover By Type Of Shop
The package is broadly the same across retail, and the pressure points are not. A salon has treatment risk and product liability on what it applies to clients. A food retailer has stock deterioration if refrigeration fails, and a hygiene exposure. A high value retailer has stock limits and security requirements that are stricter than the standard schedule.
We write cover for hairdressers, barbers, beauty salons and mobile therapists, and for the food side including takeaways and restaurants. Where your trade has its own page, that is the better place to start, because the detail that matters to you is on it.
If your shop does not fit any of the usual categories, that is normally a conversation rather than a problem. Unusual stock and unusual premises are the two things that need a broker rather than a comparison site.
What Moves The Price
We do not publish a starting price for this cover, because a figure that is not drawn from a policy we actually placed is worth nothing to you. What we can tell you is what the premium is built from.
- Sums insured for stock, contents and the fit out
- What you sell, and how attractive it is to thieves
- Location, and the claims history of the area
- Security: locks, alarm specification, shutters and CCTV
- Whether anybody lives above the premises
- Your own claims record, excluding glass on most wordings
We are a broker, so we take it to several insurers rather than quoting one. Call 02382 000820 and you will have a real figure rather than a range.
What We Need To Quote
- Stock sum insured, average and at seasonal peak
- Contents, fixtures and tenant's improvements sum insured
- Annual turnover and gross profit for business interruption
- Security in place: locks, alarm type, shutters, CCTV
- Maximum cash held on the premises in and out of hours
- Number of staff and annual wageroll
Cover that often goes with this
The gaps we most often find sitting next to this policy.
- Hairdressers and salonsThe salon version, with treatment risk and product liability covered properly.
- Business interruptionSetting an indemnity period that survives a full refit.
- Commercial combinedThe same package for a business that is not a shop.
- Tradesman insuranceThe trade version of this, with tools and van cover built around it.
- All trades A to ZCover written for your specific trade rather than the general product.
- Talk to a brokerTell us what you do and we will say which of these you actually need.
Common questions
Does shop insurance cover the building?+
Only if you own it or your lease makes you responsible for it. Most tenants need contents, stock and tenant's improvements rather than buildings cover, but check the lease, because responsibility for glass and for the fit out frequently sits with the tenant.
Is shoplifting covered?+
Usually not. Most theft sections require forcible and violent entry, which excludes walk in theft during trading hours. Stock losses to shoplifting are generally treated as a trading cost rather than an insurable event.
What happens if my stock is worth more than the sum insured?+
The insurer can apply average and reduce the settlement by the same proportion you are underinsured. Insure for £40,000 when the true value is £80,000 and a £20,000 loss may settle at £10,000. It applies to partial losses too, which is most of them.
Do glass claims affect my premium?+
On many retail wordings glass is recorded separately from the main claims experience, so a broken window does not sit on the record the way a theft or fire claim would. It is not universal, so it is worth confirming on your own policy.
How long should my business interruption indemnity period be?+
Long enough to find a unit, refit it and get customers back. Twelve months is the common default and is often too short for retail, because a total loss means rebuilding, refitting and rebuilding the trade. Twenty four months is a more realistic starting point.
Other cover we arrange
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