Shop insurance

Find out more about shop insurance, what it covers and whether your commercial property is protected against dangers including flooding.

Key points

  • Shop insurance can include various elements of cover, from public liability to accidental damage
  • If your shop is in an area at risk of flooding, make sure you're covered against it
  • Online retailers need insurance too, but their requirements may be different

If you own a shop, you'll need to get the right business insurance for your needs.

Regardless of whether you're a running retailer, own an eyewear emporium or have an outerwear outlet, you'll need business insurance to protect your shop and your stock.

Shops can be threatened by a number of perils, from theft to flooding, which makes insurance essential.

Find out more about shop insurance and what elements of cover - and what levels - your business might need.

What does shop insurance include?

Shop insurance can be tailored to cover your businesses specific risks, but there are a few core elements to a shop insurance policy.

Public liability insurance

Running a shop means customers, which also means the need for public liability insurance.

This isn't a legal requirement, but in the event a customer or third party is injury or their property is damaged while on your premises, it'll be invaluable.

If a customer makes a claim, public liability will cover the cost of compensation and legal fees.

Professional indemnity insurance

If you offer advice or expertise from your shop, you may need professional indemnity cover.

In the event a client isn't happy with your advice or believes you've been negligent, this will protect you. Beginners' guide to business insurance

Product liability insurance

In the event a product you manufacture causes an injury or illness, product liability insurance will cover you.

Business interruption insurance

If your shop has to close due to damage caused by flooding or illness, business interruption will help to cover the loss of income you might suffer during that period as well as costs like rent.

Buildings insurance

If you own your shop and need buildings insurance, you may be able to include cover for your premises within a business insurance policy.

If you rent your business, your landlord is responsible for buildings cover.

Business contents

Business contents covers the interior of your shop, from fixtures and fittings to your equipment and any furniture.

Stock insurance

Most shop owners store at least some of their stock in the premises itself, and there's a risk it can be stolen or damaged through fire or flooding.

Stock insurance will protect your store up to a certain amount, so that your cash flow or the future of your business isn't put in jeopardy.

Check your business insurance policy to make sure that the value of the stock protected is enough for your needs, and look into whether your policy allows you to increase the value covered around certain dates such as Christmas.

Stock must be insured for its trade price, and not for profit.

If you sell high-value items such as jewellery or fine art, these might also be excluded from your policy - read the terms and conditions beforehand.

Some events - such as flooding - may also be excluded from cover, so make sure you read your policy if you're at risk.

Accidental damage

Accidental damage can cover a wide range of situations , and it may not be included as standard under your shop's insurance policy.

Flooding insurance

If your shop is at risk of flooding or in an area that has previously experienced flooding, business insurance may be more expensive or difficult to get.

Flood Re helps make affordable home insurance available for those at risk of flooding, but it doesn't extend to businesses.

While Flood Re came into effect for residential homeowners in April 2016, the scheme doesn't include business insurance for work premises that are at risk of flooding.

According to a July 2015 report by the Federation of Small Businesses (FSB) around 75,000 smaller businesses at risk of flooding have struggled to get insurance. Another 50,000 have been refused flood cover, according to the FSB.

Buildings insurance pays for damage caused by flooding and if you own a commercial property you should cover it for the full cost of rebuilding.

You will also need to ensure you have contents insurance to cover the cost of stock and fixtures and fittings.

Online shop insurance

Whether you're a small one-man band working via eBay or Etsy or run an international e-commerce company, you can get cover tailored to your activities.

Online shop insurance covers many of the same issues as physical shop insurance, but if you have a home-based business you may be covered by your home insurance - check your policy to find out. 

Things to consider

Business insurance for shops can include many of the above elements, so consider combining them all in one policy.

Check that the levels of cover offered by the policy are sufficient for your needs, especially when it comes to cover for stock, accidental damage or theft.

Remember, when comparing business insurance that the cheapest isn't necessarily the right product for your needs - cheap cover may mean important elements like flooding cover are excluded.

When you compare business insurance with Gocompare.com, you'll have the option to purchase online and/or speak to a specialist in a UK-based call centre if you need further guidance.

By Emily Bater