The day-to-day tasks associated with running a retail business would keep anyone busy. That’s why the last thing any retailer wants are issues associated with a loss being added to their to-do list. That’s where retailer insurance comes in.
But with so many coverage options out there, where should you start? Check out these five key coverages we recommend.
Commercial General Liability Insurance
You can clear the paths leading into your store, lay down extra skid-resistant mats at your entrance, and place “wet floor” signs wherever you like. But despite your best efforts, someone may injure themselves on your property. And you could be held liable for that, eventually finding yourself involved in a costly lawsuit.
That’s why commercial general liability insurance, or CGL for short, is so important. As the foundation to any liability insurance program for business owners, CGL insurance is designed to protect you if you’re found legally liable for bodily injury or property damage to a third party.
Federated offers extensive coverage with our CGL policies, which is why our policies include bodily injury/property damage liability, personal and advertising injury liability, employee benefit program liability, and coverage for medical payments.
Commercial Property Insurance
While you’re busy making sales, you also need to be prepared for the possibility of fires, floods, and vandalism.
You can and should take precautions to mitigate these risks, such as preparing employees for an emergency situation, having the necessary equipment to deal with fires or flooding, and increasing security measures. But sometimes, even that isn’t enough.
Commercial property insurance provides protection not only for your building, but also for many of its contents, such as equipment, furniture, fixtures, tools, machinery, and property of others.
Cyber Risk Coverage
In 2017, just over one-fifth (21 per cent) of Canadian businesses reported that they were impacted by a cyber security incident which affected their operations. And the number of cybercrime complaints in Canada has been rising steadily over the years. In 2014, the RCMP fielded 7,965 complaints of cyber-crime. In 2015 that number rose to 9,217, and in 2016 it hit 11,518.
With these numbers continuing to increase, it’s more important than ever to make sure you have the right coverage to protect yourself and your business. Yet, 77 per cent of owners surveyed didn’t have any coverage for data breaches and cyber-attacks, according to an internal Federated poll conducted on 300 small business owners. Only a third of those polled felt confident that they had the financial resources to survive an attack that exposed their customer data, or a class action suit as a result of an attack.
Some retailers may think their current insurance policy covers cyber through property or liability coverages. But, unfortunately, that just isn’t the case.
Since data is not considered a tangible property, it’s typically excluded under a property policy. Only cyber insurance coverage protects you from unique risks like loss or corruption of electronic data or loss of income resulting from a computer virus or malware.
Cyber insurance does more than protect you against malicious hackers and cyber criminals; it also covers human error and losses caused by employees. This is especially important because while most breaches in Canada are due to malicious attacks, a 2016 report sponsored by IBM and conducted by the Ponemon Institute found that 25 per cent of breaches are due to negligent employees or contractors.
25 per cent of cyber breaches are due to negligent employees or contractors, according to a 2016 report sponsored by IBM and conducted by the Ponemon Institute.
Comprehensive Crime Coverage
As a retailer, crime should be one of the top risks you’re on the lookout for. Organized retail crime costs Canadians over $4.6 billion a year, according to statistics from Calgary police. Their stats also say that 87.5 per cent of independent stores fall victim to this kind of crime.
As if that wasn’t bad enough, according to The Retail Council of Canada, some of that theft is happening because of your own employees. The council, a non-profit that represents more than 45,000 retail stores across Canada, found that employee theft is costing Canadian businesses about $1.4 billion every year.
So what can you do to deal with these risks? Federated’s comprehensive crime insurance protects against employee dishonesty and the loss of money and securities due to robbery, burglary, and hold-ups. We also offer services to help you improve your security measures, which can help minimize your exposure to risk.
And you can always take preventative measures yourself. Ensuring you have adequate lighting, installing security cameras, using electronic tags on your merchandise, and placing expensive items near your checkout are all good steps to take.
Business Interruption Insurance
After something goes wrong, the worst may be yet to come. If you suffer a loss or damages, your business may be unable to operate for some time. And that lost time can lead to lost profits.
Thankfully, that’s where business interruption insurance comes in. You can collect the income you would have expected to generate, were it not for the unexpected event. The policy may also cover your normal operating expenses, and extra expenses in order to expedite your return to business or limit your losses.
Protect yourself
Risk and retail go hand-in-hand. But so do comfort and coverage.
As a retailer, you have a lot on your plate already. Worrying about property damage, liability lawsuits, and cyberattacks shouldn’t consume your days. But retailer insurance can help. With Federated insurance specifically designed for wholesalers and retailers, you can rest assured that you’re protected should something go wrong.
This blog is provided for information only and is not a substitute for professional advice. We make no representations or warranties regarding the accuracy or completeness of the information and will not be responsible for any loss arising out of reliance on the information.
