Retail businesses are vulnerable to a broad range of risks, from natural disasters and fires to more retail-specific issues such as supply chain disruptions. Even one of these events could be enough to put your business’s most significant asset in danger: your inventory.
Without the goods on hand that you sell to make money, your business could be forced to close its doors for good. Therefore, protecting your inventory with comprehensive retail insurance is essential for your business’s survival.
What is Retail Insurance?
Retail insurance is a specialized type of commercial insurance designed to address the specific risks that retail businesses face, along with more general risks that all businesses need to address.
For many small businesses, this offering will come in the form of a business owner’s policy, which combines property insurance with general liability insurance to ensure the basics are covered. Here is a look at other factors to consider.
Inventory Coverage
Commercial property insurance is a foundational policy that can protect your retail business’s equipment and inventory from covered events, including incidents such as fires or burst water pipes. This type of insurance can help cover replacement costs for lost inventory and the repairs needed to become operational again.
The inventory coverage provided by a complete retail insurance policy can protect the goods your business sells from many types of damage and loss. It may include coverage for events such as theft, vandalism, flooding, and fires.
In order to ensure maximum coverage, it is important to assess your inventory’s value regularly and make sure that your policy reflects any changes to the type or number of goods you sell.
This assessment is particularly pressing ahead of peak shopping seasons when you may have higher levels of inventory than usual and need additional protection.
Supply Chain Insurance
This type of insurance offers protection against disruptions in the supply chain, an issue that can seriously compromise your business’s inventory and bottom line.
For businesses that rely on one or more third-party suppliers, this type of insurance can prove helpful in the event that a disaster interrupts the supplier’s normal business operations.
Although the specifics will depend on the policy, it typically covers interruptions caused by natural disasters, strikes, and political unrest.
The Cost Of Retail Insurance
Several factors can influence how much you can expect to pay for retail insurance that covers your inventory and operations. The type of store and assets you sell influence the cost of your policy significantly; those selling luxury goods will face higher replacement costs than discount stores.
The number of employees you have, the size of your payroll, your claims history, and the property you own will also figure into this calculation.
Additional Types Of Coverage
Protecting your inventory may be your top priority, but all retailers can benefit from seeking additional coverage options to provide greater protection. Here is a look at some popular options for additional coverage.
Data Breach Insurance
Many modern retailers handle and process customer data, and this type of insurance provides valuable protection against the losses associated with data theft and other types of cyber attacks.
It can also cover the expenses involved in notifying affected customers and offering credit checks to minimize the damage to customers’ credit scores.
Business Interruption Insurance
Business interruption insurance is a valuable type of coverage that can replace the income your business loses should you be unable to open temporarily following a covered type of loss, such as property damage.
This means that if, for example, a tree falls on your store’s roof and you need to close your doors while it is repaired, the cost of your lost income could be covered by the policy until you can resume normal business operations.
This type of policy not only covers the revenue you would normally make if your business had been open but also any rent, lease, and mortgage payments that are owed on the space where your business operates during the downtime.
It may also cover taxes, loan payments, and employee payroll. In cases where a store must move to a new temporary location due to physical damages, it may also cover relocation costs and the extra expenses of renting the new space.
Learn More About Protecting Your Retail Inventory With JMG Insurance
Comprehensive retail insurance is an excellent investment in the future of your business. The experienced and reputable retail insurance agents at JMG Insurance Agency can work with you to determine your specific needs and customize an insurance policy to suit your budget.
Contact us today to find out more about obtaining the right level of coverage to protect your business.
