Retail Insurance 101: Is It Really Necessary?

One of the most common questions new retail business owners ask is whether or not insurance is necessary. No matter how much time you spent preparing and planning for your business, disaster can strike at any given time, without prior notice. This, of course, is where retail insurance comes into play: while you may never use it, insurance will give you the peace of mind knowing that your business is financially covered in the event of a disaster. But is this reason enough to purchase insurance for your retail business? And how much coverage should a good policy include? To learn the answers to these questions and more, keep reading.

Liability

While retail insurance policies vary in terms of coverage, you'll find that most of them offer premises liability. If a customer happens to injure themselves in your store, your insurance company will take the financial burden of the accident. Of course, liability isn't limited strictly to customers; some policies may also employee, contractors, and freelance workers. Talk with your insurance provider to determine what forms of liability are covered.

Protect Your Store From Counterfeit Currency

You might be surprised to learn that some retail insurance policies actually protect businesses from the use of counterfeit currency. While local police and federal agents have stepped up their action against counterfeit currency, the problem continues to grow as a result of the advanced software and printing technology of today. It's estimated that over $300 billion of counterfeit currency is currently circulating within the U.S. And if some of this currency happens to pass through your store, is could take a significant chunk from your net revenue while forcing you to spend time contacting the authorities.

Natural Disasters

Natural disasters are a real threat to retail businesses, especially new businesses trying to lay the foundation for their success. Tornadoes, earthquakes, floods and hurricanes (in coastal regions) can leave retail stores and businesses is shambles. While there's no way to prevent natural disasters from striking, retail business owners can purchase insurance to protect themselves financially.

Other Coverage Offered In Retail Business Policies:

• Loss of revenue from power and/or utility interruption
• Sewer backup
• Renovation damage
• Fires
• Theft
• Accounting or financial errors

The short answer is that yes, retail insurance is necessary to run a successful business; however, you should take the time to create a plan that's customized to fit the needs of your business.