What retail business insurance covers

The property section covers merchandise, shelving, displays, registers and computers, and the improvements and betterments you installed in a rented space, against fire, theft, vandalism, water from a burst pipe and similar perils. Stock is the number that goes wrong most often. It is insured at cost, not retail, and the limit has to be set from the busiest month, not a typical one; many forms include a peak-season increase for a stated window, and a store that stocks up for the holidays should confirm it is there. Property in transit and at trade shows or a second location needs its own small extension.

General liability pays when a customer is injured in the store or by something you sold: a fall on a wet entry mat, a display that tips, a child hurt by a toy that was recalled, an allergic reaction to a cosmetic. Products liability is the part that follows the goods home, and it matters more for a store that imports, private-labels or resells goods from small makers, because the manufacturer's own insurance may be thin or overseas. The lease's additional insured requirement is met on this section by endorsement.

When a covered loss closes the store, business income pays the net profit you would have earned and the expenses that continue, including rent and payroll, for the period it takes to repair and restock. Extra expense pays the cost of operating another way, such as a temporary location or expedited shipping on replacement stock. Package policies often write this on an actual-loss-sustained basis for a set number of months rather than with a dollar limit, and the length of that period is the thing to check against how long a rebuild of your space and a reorder of your stock would really take. Civil authority coverage extends it when access to the store is blocked by damage nearby.

Property insurance covers theft by outsiders. It excludes theft by your own employees, and it limits money and securities to a small amount. A crime section, or a separate crime policy, adds employee dishonesty for stock and cash taken over time, money and securities inside and outside the premises including the deposit run to the bank, forgery of cheques, and, with an endorsement, funds transferred out after a deceptive email. For a store with a few employees and a cash drawer, the employee dishonesty limit is the one that pays most often, and it usually has to be requested.

Equipment breakdown pays when refrigeration, the HVAC system or the point-of-sale network fails from an internal electrical or mechanical cause, which a fire policy excludes. A store with perishable stock adds spoilage for the contents of coolers after a breakdown or outage. If you sell online, the card data and customer records you hold bring a cyber exposure that the package does not cover, and a cyber section or standalone policy fills it; the card processor's agreement puts breach costs on you regardless of what your package says.