Coverage fit for purpose

Forum Insurance talks insurance for retailers

Forum Insurance team

HOPE for the best, plan for the worst may be a cliche, but it’s a cliche for a reason, and those business owners who take heed often see the benefits sooner or later.

The team at Forum Insurance certainly believes that preparing for a rainy day is vital to ensuring long-term success in the convenience sector.

Forum Insurance – which boasts 30 years of experience protecting retail businesses – offers a broad range of coverage options for businesses, and the firm has offered up the following guidance for retailers to consider when assessing their coverage needs.

Liability Cover

There are two main types of liability insurance to provide protection against accidents in your store.

Public liability insurance is designed to cover compensation payments and legal costs if a member of the public sues your business because they have been injured or their property has been damaged.

For example, if an employee fails to put out a wet floor sign after cleaning the floor and someone slips and breaks a bone. In this instance, your public liability insurance would cover the financial impact of an unexpected claim up to the maximum stated limit of liability.

Employers liability insurance is a legal requirement, and is designed to protect you from financial loss if your employee becomes ill or injured whilst under-taking their work for you.

Business Interruption Cover

In the event your business cannot function as usual you will most certainly start losing income.

Business interruption insurance will put your business back in the same trading position it was before the unforeseen event occurred.

This insurance will cover your loss of revenue or profit for the period of inability to trade.
With this cover in place you can assure that any interruptions in your business will not result in financial loss.

No more sleepless nights that a burst water pipe or fire damage are costing you lost income as your store is closed.

Contents Cover

Protecting vital assets like your fixtures, fittings, and equipment is essential for the function of any business.

You should ensure your contents are covered on a new-for-old basis to secure your longevity in the industry. Accidental damage, a burst pipe or an electrical fire are risks we can prepare for, but the replacement costs can be enormous.

Having the incorrect level of coverage will leave you out of pocket, due to the ‘averages clause’ most insurers follow.

This clause can result in insurers reducing claims settlements if you accidentally or intentionally underestimate the value of your contents.

For example, you have valued your contents at £20,000 but the actual value is £40,000. This is an underinsurance of 50%, according to the clause the insurer is entitled to pay out only 50% of the claim value.

It’s horrible to think, but to continue this example the business is burgled and the business claims for £12,500 of losses. The insurer can use the average clause to pay out 50% of the value of the claim meaning only a settlement of £6,250 and the other £6,250 would be paid from your business.

Self-insuring or underinsuring can save you a small sum of money in the short term on the premiums, but in the event of a claim those savings can be wiped out in an instant, setting you back a lot further than your initial saving achieved by reduced levels of cover. Don’t be caught underinsured.

Typically the store’s general stock is not covered under your contents insurance and will need to be covered separately on the policy.

Wines and spirits should be covered separately to general stock, and cigarettes are also covered separately.

Deterioration of stock

If you have frozen stock, this should also be covered separately, which can provide cover for damaged stock in the event of breakdown of the fridge or freezer.

If you have a cold-room there are increased risks and this will need to have its own provisions within the policy.

Goods in transit

Goods in transit will cover you for any loss or damage to stock while traveling between your supplier(s) and your store(s) up to your chosen limit.

Theft of Cash

Theft is a daily risk your convenience store faces. Whether you’re open or closed, there will be cash at your premises.

The cover available is often restricted depending on the circumstances, for instance there will be a limit on cash covered in the till, in a locked safe overnight, and when in transit.

If you’re in doubt that you’re sufficiently covered, use your busiest day possible and set your cover to those levels.

If you’re transporting cash from your store to the bank or bank to the store then you would need cash in transit.

Fidelity cover is when your employees steal cash from your business, it isn’t always required but as you grow, so will your risk of it occurring.

What now?

Not every business has the exact same requirements and risks. Getting an expert review of your insurance with a broker will put your mind at ease and secure your path to long term success.

At Forum Insurance we offer free reviews and quotations. We will create a tailored insurance policy with the covers that are a right fit for you and your business at competitive rates.