Shop Insurance

This is a brief overview of shop insurance in the United Kingdom and the cover under the shop insurance policies that generally available from most insurers.

Shop Insurance Packages

The shop insurance package policy was generally developed and came to the fore in the late 1970s and early 1980s.  This was the response of insurance companies to the question of how to provide a comprehensive suite of covers that broadly catered for the needs of the shop and retail market. prior to the development of these policies, a shopkeeper would need to take out, a whole range of individual insurance policies in order to ensure complete protection.  Over the years, the shop insurance policy has been developed by insurers seeking to gain competitive advantage by expanding the cover, simplifying the policy wording and making the premiums as competitive as possible.

The cover is under the shop policy can be broken down into a number of key areas of protection.

Property Damage

This aspect of cover, may be considered as the backbone of the shop insurance contract, it is also the cover under these sections.  That is largely responsible for the premium along with the specific retail trade involved.

under the property damage section cover is provided for the material assets of the business and a responsibilities for property damage placed upon the policyholder by others, most notably the buildings and landlords fixtures and fittings under a full insuring lease.

This section the policy will protect  stock, machinery and plant and all the business contents.  Where required the buildings may also be included.

The cover provided as standard is generally Fire, Full Special Perils and Theft, with many insurers offering Accidental Damage cover for a small additional premium whilst others include this peril as standard. We strongly advise all clients to take this cover and indeed do not provide quotes the standard without it. Special Perils relates to a list of standard insured risks that includes "burst pipes, impact, riot" and others.

This section of the policy also includes cover in respect of glass breakage and whilst this was traditionally a separate section of the policy it is now considered by many to be part of the main property damage section.  It is worth noting that sanitary ware is also included in this section the policy.  Prospective clients should ensure that the cover under the glass section is adequate for any special glass that is present at the premises. 

Business Interruption

This section of the policy is intended to protect the policyholder in respect of any loss of income as a result of the happening of an "insured peril". a classic example of this type of claim would be where a fire occurs at the premises and the business cannot trade on till all the damage has been repaired and the stock replenished.

The business interruption section of the shop insurance policy also contains a number of studies extensions which are common to most contracts.  Please contact us if you require more information on this matter.

It is also worth noting that this section of the policy is often referred to as "Loss of Profits Insurance".

  Loss of Business Money 

this section of the policy protects the insured against physical loss of business money and negotiables.  Most policies will provide protection for cash in transit, cashing safe, cashing the business premises and also cover for business money at home or at the home of an employee.  Most policies come with a standard limit that is generally adequate for most retailers.

Liability Insurance

All shop insurance policies include a combined liabilities section.  This provides public liability insurance, product liability insurance and employers liability insurance to the policyholder.

The public liability insurance products protect the policyholder in respect of their legal liabilities for damage or injury to third parties arising out of or in course of their business.

The product liability section protect the policyholder in respect of legal liabilities arising out of the sale or supply of a good or product.

The employers liability section protect the insured in respect of their legal liabilities for injury to employees arising out of the course of their employment.  Employers Liability Insurance is a legal requirement for all people and businesses in the United Kingdom that employee persons whether this be on a part-time or full-time basis.  There are some Ltd exceptions to this requirement relating to close family members and whilst we normally advise clients to effect this cover in respect of farmer numbers this is somewhat superfluous with regard to shop insurance as the cover is provided automatically.

Goods in Transit Insurance

This cover is generally speaking an automatic inclusion under the policy.  The intention is to protect the policyholder in respect of loss or damage to start and goods whilst in the course of transit.  In most cases this will relate to the transport stock to and from the wholesalers. Insurers provide standard limits this cover and if these are inadequate to you will need to make additional provisions.

Deterioration of Stock/Frozen Foods

This cover may be provided as standard or it may be an option under the policy.  It is pertinent in particular to retailers and shopkeepers such as butchers, who keep a significant amount of stock in freezers and where the failure of those freezers may cause significant financial loss. it is important to note under this cover that most insurers will warrant that the freezer is either less than a certain age and/or not a maintenance contract is in force in order to the cover to be valid.

Loss of Licence

This is an optional cover extension applicable only to businesses where a liquor licence is held and the intention of the cover is to protect the insured against loss of that licence by the action of a local authority as a result of circumstances where the policyholder is not at fault.