Insurance for Retail Stores

Retail stores can sell a variety of items including clothing, housewares, electronics, furniture, sporting goods and toys. Stores can be small rented spaces or they can have more than one floor and have elevators and escalators to provide access. Some stores offer services such as tailoring or alterations, beauty salons, photography studios, optical services, engraving, refinishing, furniture reupholstering and repair of appliances or electronics.

Delivery and installation of products is common to many types of Retail Stores. Some services may be offered by vendors who rent space from the store. Shopping carts may be provided for customers’ convenience. There is a vast amount of product and service differentiation within the retail store industry.

Recommended Insurance Programs for Retail Stores

Minimum recommended coverage:

• General Liability Insurance
• Commercial Crime Coverage
• Property Insurance
• Inland Marine Coverage
• Employee Dishonesty Bonds
• Business Income with Extra Expense
• Workers Compensation Insurance

Other coverages to consider for Retailers:
Business Personal Property, Business Income, Equipment Breakdown, Employee Dishonesty, Money and Securities, Accounts Receivable, Bailees Customers, Goods in Transit, Valuable Papers and Records, Employee Benefits, Business Umbrella Policy, Hired and Non-Owned Auto, Earthquake, Flood, Leasehold Interest, Real Property Legal Liability, Computer Fraud, Forgery, Jewelers Block, Data Breach Insurance(Cyber Liability) and EPLI.

Common Risks and Needs Associated with Retail Shops

General Liability Insurance
GL insurance liability comes from slips and falls due to public access to the retail store or shop. Floor coverings should be in good condition with no frayed or worn spots on carpet and no cracks or holes in flooring. Steps and uneven floor surfaces should be prominently marked. Sufficient exits must be provided and be well marked, with back-up lighting systems in case of power failure.

All goods for sale should be kept on easily reached shelves so customers do not pull items down onto themselves.

Parking lots and sidewalks need to be in good repair with snow and ice removed, and generally level and free of exposure to slips and falls. If the business is open after dark, there should be adequate lighting and appropriate security for the area. Carts provided for customers’ use should be frequently retrieved from the parking lot to prevent damage to vehicles.

If other vendors provide services to your retail store, the store should require certificates of insurance verifying appropriate limits of liability.

Personal injury GL risks are from dressing rooms, which must be well maintained with privacy carefully guarded, and from apprehending and detaining shoplifters. Shoplifting procedures must be fully understood and utilized by all employees.

Product liability is normally low to moderate, depending on the products sold. Foreign-made items should come from a domestic-based wholesaler. Any direct importer should be considered as a product manufacturer.

Property Insurance
Property liability risks are not tremendous for retailers. Electrical wiring and heating and cooling systems should be maintained and meet current codes for the occupancy. Theft is a concern if there are items with high value, especially computers, televisions, radios, compact discs and other electronic devices. Appropriate security measures should be in place including physical barriers to prevent entrance to the premises after hours and an alarm system that reports directly to a central station or the police department.

Business interruption can be high as the store may do the bulk of its business during the holiday season.

Commercial Coverage
Crime exposures generally stem from employee dishonesty and loss of money and securities either from hold-up or safe burglary. Background checks should be conducted on all employees handling money, if possible. There should be a clear separation of duties between persons handling deposits and disbursements and handling bank reconciliations. Money should be regularly collected from cash drawers and moved away from the collection area, preferably to a safe on premises. Bank drops should be made throughout the day to prevent a build-up of cash on the premises.

Inland Marine Coverage
Inland marine liability risks come from accounts receivable if the store offers credit; bailees customers if the store accepts customers’ items for repair; computers to transact sales and monitor inventory; goods in transit if the store transports goods between stores or makes deliveries; jewelers block if the store carries jewelry valued at more than $2,500; and valuable papers and records due to vendors’ and customers’ records. Back-up copies of all records, including computer records, should be made and stored off premises.

Workers Compensation
Workers compensation liability risks come from employee lifting which can cause back injury, hernias, sprains and strains, and from slips and falls. Employees should be trained on proper handling techniques, and have conveying devices available to assist with heavy lifting. If tailoring services are offered, there may be injuries from sewing and cutting. Equipment used for repair operations should be appropriately maintained to prevent injury. In any retail business, hold-ups may occur. Employees should also be trained to respond in a prescribed manner.

Retail Business Liability Quotes

General Liability Shop.com offers affordable liability insurance quotes for Retail Stores throughout the U.S. Our Retail insurance programs include all lines of business insurance, as well as our Target programs for business owners policies (BOPs). Contact one of our business insurance Specialists today at 800-900-8657, or start a quote online now.

Retail Business Liability Classification Codes

Commercial insurance companies use various liability classification systems in order to classify and rate coverage premiums for Retail Stores. There are hundreds of retail classifications for Retailers. Here are some of the more common business insurance classifications for Retail Shops:

Business Liability Category: Retail Stores

SIC Business Insurance Codes:

• 5311: Department Stores
• 5722: Appliance Stores
• 5941: Sporting Goods Stores and Bicycle Shops
• 5651: Family Clothing Stores
• 5912: Drug Stores and Proprietary Stores
• 5331: Variety Stores
• 5399: General Merchandise Stores
• 5932: Used Merchandise Stores

NAICS Liability Classifications:

• 452111: Department Store
• 452112: Discount Stores
• 443141: Household Appliance Stores
• 451110: Sporting Goods Stores
• 448140: Family Clothing Stores
• 446110: Pharmacies and Drug Stores
• 452990: Other General Merchandise Stores
• 442299: Home Furnishing Stores
• 453310: Used Merchandise Stores

Business ISO General Liability:

• 12356: Department or Discount Stores
• 10026: Antique Stores
• 18206: Sporting Good or Athletic Equipment Stores
• 11127: Clothing and Apparel Stores
• 12374: Drugstores—No Food or Beverage
• 18911: Variety Stores
• 11155: Coin, Stamp and Book Stores
• 16881: Secondhand Stores

Common Workers Compensation Class Codes:

• 8039: Retail Department Stores
• 8044: Furniture Store and Drivers
• 8008: Clothing and Apparel Stores
• 8045: Retail Drug Stores
• 8017: Stores, Retail—Not Classified Elsewhere
• 8010: Hardware Stores
• 8013: Jewelry Stores
• 8046: Auto Parts and Accessories Stores