Retail Business Insurance Essentials

Retail business insurance provides benefits to businesses that provide retail products to the public. The types of insurance can be for a variety of purposes, as there is no broad classification as retail business insurance but just business insurance. These purposes include benefits for employees, liability coverage for losses, damages, theft and protect the company against lawsuits arising from errors and omissions.

The needs of a retailer to sell their products and create a business presence, be in a single store or a mall or other outlet, can be protected by different types of retail business insurance. Insurance provides a benefit that is payable relative to its associated risk. A retailer that is concerned about merchandise losses due to shoplifting and employee theft may consider purchasing a theft loss policy.

General Liability Insurance

The basic type of business insurance that a business owner needs is general liability insurance. This type of business insurance protects the interests of the retailer against loss that occurs related to the nature of their retail business. A general liability plan can provide for damages to merchandise caused by a faulty sprinkler system that malfunctions. It can indemnify or restore the retailer to their original value for the amount loss due to fire or storm damage.

Lenders usually require general liability insurance when the make business loans to a retail business. A franchise operator who is making available their franchise name for the retailer to use, such as a restaurant chain or national clothing store may also require it. This insurance protects inventory and merchandise and reduces the retailer’s risk.

Errors and Omissions Insurance

In addition to general liability, another consideration for retail business insurance is errors and omissions insurance. Also referred to as professional liability insurance, this coverage provides a benefit against claims that are made against the retailer for such things as defamation, misleading advertising or lawsuits that can arise from time to time from customers.

As an example, a recent case arose in the nation’s capital involving a dispute between an administrative law judge and a drycleaner. The issue involved the claims of the retail business regarding customer satisfaction and whether the judge received satisfaction. Although the court ruled in favor of the retailer, the business had to close because of the legal bills. An errors and omissions policy may have provided the necessary funds for the retailer to defend their claim and ultimately stay in business.

Business Planning and Employee Benefits

As a business owner, if you have additional partners, owners, or employees, you should consider purchasing life insurance to fund a business succession plan, provide for the needs of a key employee, or fund employee benefits. Businesses of all type use insurance as a way to provide a valuable asset in order to meet their growing needs and ensure that the business and its employees are taken care of.

If you are a retail business or considering operating one, you should consult with a professional business insurance agent or company. They can provide you with information about the types of plans that are available and the coverage that is right for you and your retail business needs.

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