It is important to obtain the best price on your shop insurance but obtaining the correct cover is equally, if not more, important. Our guide on how to compare shop insurance quotes provides you with some key information to help you make the right decision on your business insurance for your shop.
Let’s first look at some basics about the product;
What is shop insurance?
Over the years insurers have developed what is a fairly standard approach to the insurance market for retail businesses to the degree that shop insurance package policies look very similar from insurer to insurer, similar but not the same.
The basis of the policy is that it brings together a whole range of separate covers under one contract to provide the customer with a single unified policy that offers the core and essential coverage that would suit the needs of most retailers. Typically of most companies developing a product simultaneously they all have a familiar feel to them and tend to be presented in the same way.
First we shall look at the structure and the basic cover of the policies and then identify some key areas that you need to be aware of when you are comparing shop insurance products from various insurers.
Material Damage and Property Damage
This is a key area of cover for both policyholder and insurer. This section of the policy provides insurance in respect of damage and loss to material property, the physical assets of the business, such as stock, goods in trust, business contents, plant and machinery and and any buildings that need to be insured under the policy. It is also one of the key rating factors used by insurers to calculate the premium for the risk.
This section of the policy provides financial protection for the policyholder against losses caused by a reduction in turnover following a property damage claim. In short if you have a fire at the property and you are closed for business, you can expect your business interruption insurance to pay out in respect of your fixed costs for the business and any consequential loss of profits to you.
This provides cover in respect of the cash within the business, at the premises, in transit and at the private homes of the principals or employees of the business.
This provides both third party liability insurance, public and products liability, protecting you against claims in respect of your legal liability for personal injury and property damage and employers liability protecting you against claims for your legal liability for death, injury or disease sustained by an employee during the course of their employment.
Goods in Transit
Cover for property in the course of transit
Broadly speaking these are the main “heads” of cover under most standard shop insurance policies. It is worth noting that if yo do not require any of these covers, there is no discount for removing them.
What to check in your shop insurance quote
Having established the basic structure of the retailers policy, what should you be looking for in any quotes to make sure that you are comparing like with like.
The first thing to point out, and this applies to all policies is that you get your basic sums insured right. Often this is the only level of cover that you actually select yourself under a shop insurance policy and under-insurance can have dire consequences in the event of a claim.
The material damage cover under a policy is based on a standard fire and special perils cover and many insurers do not include accidental damage as standard. You have to request the cover. When it is ot included automatically the additional premium for the cover is relatively small compared to the overall cost and the benefits of the insurance.
Subsidence, heave or landslip
This cover is not included on commercial insurance policies as standard. many people will have experience of home insurance where the cover is automatically provided under the policy, it is not included in all shop insurance quotes. if you have buildings insured under the policy you should make sure the subsidence cover is there.
Cover in respect of acts of terrorism is not included as standard, if you need the cover you must request it.
The excess is the amount you pay, your contribution, in respect of any claim under the policy. These differ from insurer to insurer and you should check what property damage excesses apply to each quote you review.
Most policies, but not all, provide you with a standard limit of cover in respect of business interruption. Some are based on multiple of your contents sums insured, be careful that these are enough, others provide you with what seems a very high limit as standard and a few do ask you to select the level of cover you require. The important factors here are to make sure the cover provided is adequate but equally do not be impressed by the large sums under some policies. In the event of a claim you will have to prove your loss. the insurer is not going to send you a cheque for £500,000!
Different policies provide different standard limits in respect of the types of loss under the business money section. You will have limits for cash in safe, cash in transit, cash at home and cash in the business. make sure they are adequate for your needs. Again do not buy a policy just because it has higher limits than the others, just make sure the limits under the policy you buy are sufficient to meet your requirements.
The employers liability insurance limit of indemnity under every policy will be £10M, this is standard.
Under the public liability different insurers will provide different limits, £1M, £2M or £5M usually. Check that you are happy with the limit.
Most policies will automatically include public liability insurance in respect of collection and delivery only. If you undertake other types of work away from your premises you need to ensure that this is covered, either under you shop insurance policy or elsewhere.
If you undertake any treatments within your business, then you need to make sure that the treatments you perform are included. More information on this complex area is available on our treatment risk page.
Goods in Transit
The policy will provide for a specific limit in respect of any one load, this varies from insurer to insurer, just make sure that it is adequate for your needs.
Physical security under shop insurance policies
Clearly insurers have an interest, as do you, in making your property secure from the risk of theft and malicious damage. There tends to be a minimum security standard that is fairly common to most insurers and all quotes will be subject to the property having that level of security. Make sure you comply.
For different trades and as sums insured increase insurers have different trigger levels for requiring additional security measures at the premises. Some will require additional physical or alarm security where others won’t. if yo accept a policy on the basis that the increased level is there, you must comply with that level.
How much is shop insurance?
The premium you pay for shop insurance will depend on a number of factors, the key factors being; the type of shop you operate, the location of the business, the sums insured under your material damage insurance and whether you have previously had any claims.
The price you actually pay for the insurance is also a key factor in the decision process, that seems obvious, but the base premium that you are quoted is one feature only. Look at what the charges are for any deferred or direct debit facilities are; these can be very different. Check is any additional policy or broker fees apply; these should be disclosed to you in the quote or in the terms of business.
You can apply on-line for instant quotes on hundreds of trades where you will be provided with fully detailed terms and conditions for every quote or you can call us direct to discuss your requirements with a broker who will be happy to help you obtain our best price for your shop insurance.