Shop Insurance: What Do I Really Need?
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Shop Insurance UK
As a shop owner, you can face significant financial risk if you don't have the right insurance coverages in place. Read our in-depth guide to learn about the different types of cover you might need, as well as typical costs. For quick definitions of each type of cover, see the blue boxes below and read the examples to see when coverage can help.
To find out how much you'll need to pay for insurance for your shop, fill out a quote form where you'll fill in some basic information then receive quotes from up to 5 insurance providers. You can ask questions if you have them, then pick out the best policy for your budget and needs.
Popular Types of Insurance for a Shop
There are three main types of insurance coverage that a shop needs—public liability, employers' liability and contents cover—but there are some other add-on extras you might want as well. Let's run through the list to explain what each type covers to help you decide if you need it or not.
| Common Types of Shop Insurance | What it Covers | |
|---|---|---|
| 1 | Public Liability | If someone is injured in your shop, covers legal costs and compensation payments |
| 2 | Product Liability | Usually wrapped up together with public liability, product liability covers if someone is injured or falls ill due to a product you design or sell |
| 3 | Employers Liability | If an employee is injured or falls ill due to work, Employers' Liability insurance protects against related liability claims |
| 4 | Commercial Contents cover | Contents insurance protects your stock, fixtures and fittings against damage, loss or theft. You can add accidental damage, too |
| 5 | Professional Indemnity | If you give advice or sell a service, Professional indemnity insurance protects against claims made by clients that your advice or service (not your manual work) was negligent |
| 6 | Business equipment insurance | Business equipment cover can protect your computers, printers, cash registers, etc. against accidental damage, loss or theft |
| 7 | Personal Accident/Income Protection/Critical Illness | Personal accident insurances can provide money if you're off work due to a job-related injury or illness |
| 8 | Business Interruption insurance | Business Interruption insurance can reimburse you against lost sales in the event of physical damage like flood or fire (but not usually situations like coronavirus) |
| 9 | Commercial Buildings cover | If you own your shop premises, you'll also want to buy buildings insurance to cover damage or loss due to events such as fire, flood or theft. |
Here are some examples of how these insurances can protect a shop:
Shop Insurance Examples
- Public Liability: A member of the public trips over a box left on the pavement while you're taking in shipments to your clothing shop, injuring themselves. Public liability insurance covers your legal defense fees and any compensation you're required to pay to the third party.
- Public Liability: On a rainy day, a customer visiting your coffee shop slips on a wet floor and falls, suing you for damages as a result. Public liability insurance covers your legal defense fees and compensation you're required to pay to your customer.
- Employers’ Liability: An employee falls from a step ladder, and claims bad equipment caused the accident. They sue for the wages they lost while injured and the damages of their expenses. Employers' liability insurance covers your legal defense fees and compensation you're required to pay to your employee as the result of a lawsuit against your shop.
- Business Contents Example: A fire sweeps through your gift shop, resulting in the loss of all stock in the back room as well as all of your display equipment and decorations. Business contents insurance pays to replace the stock and the lost fixtures and fittings. (And the shop premise's buildings cover—bought by the owner, either you or your landlord—would cover repair costs to the structure of the building, including pipes, floors, walls, electrics, etc.
- Professional Liability: Your garden design shop designs a plan for a garden renovation. After work has started, it's found there was a flaw in the water feature design and extra costs are incurred making it right. You're sued for the added build costs.
- Business Interruption Example: A flood ruins your dry cleaning shop, and it's closed for 3 months for repairs. Business interruption insurance covers your lost revenues over this period of time.
FAQs
Most shops will require public/product liability insurance, employers' liability insurance and contents insurance at a minimum. However, each shop is unique. Read through explanations and examples of how shop insurance works here.
The same ways you could save money on other insurances are still applicable in retail. Below are a few examples:
- No previous claims/convictions
- More years worked in the industry
- Lower levels of cover
- Strong security in your shop (e.g., alarms)
- Compare quotes in the market before you buy
Quotes were gathered for a sample shop in the South of England. No fewer than the four cheapest quotes were averaged to give us our results. Our sample profile had no prior convictions and had never been denied insurance. Your costs may be higher or lower depending on the difference in variables your risk profile is measured by.
Do Shops Really Need Insurance?
Yes, all shops inevitably need some form of insurance. Some types are required by law while others—e.g., employers' liability is a legal requirement if you have any employees or staff, even temporary or part time. Other types are not "required" necessarily but should still be purchased to protect your shop against unexpected accidents or situations that can lead to significant financial costs (like a customer suing you after slipping and falling).
For example, public liability is critical for protecting against accidental injury or damage liability claims made by third parties (e.g., customers, vendors, passersby). And most shops also buy contents insurance to protect their stock as well as shop fixtures and fittings against unexpected events like fire, flood or theft.
If you're considering skipping out on any of the typical shop insurance coverages, you should evaluate whether or not you feel confident working with little to no coverage, and if your business could survive a potentially expensive stock loss or liability claim, for example.
What are Average Insurance Costs for a Shop?
The average starting cost of shop insurance in the UK is around £400 per year. However, costs will vary from business to business, depending on factors like the type of shop, the amount of stock you hold, the level of liability coverage you want, etc. To give you a rough idea, we've run some sample quotes to insure a typical small shop in the UK. Here's what we found.
| How Much Does Shop Insurance Cost? | £2M Public Liability, Employers' Liability, £50k Contents/Stock | £5M Public Liability, Employers' Liability, £100k Contents/Stock |
|---|---|---|
| Corner Shop/ Off Licence | £373 | £452 |
| Coffee Shop | £504 | £540 |
| Florist / Gift Shop | £373 | £452 |
What about retail shop insurance?
Most of the insurances discussed above are still relevant to those operating a retail shop—public and product liability, employers' liability, contents cover, and extras such as buildings cover (if you own the premises) as well as legal expenses cover, business interruption, business equipment cover, etc.
Where can I get quotes for shop insurance?
Compare shop insurance quotes here—after filling out a short form you'll receive quotes from up to five insurance providers. You'll have the chance to talk on the phone if you have questions that you want to discuss. Then choose the cover that offers the best price and features for your needs.
More Information on Types of Shop Insurance
If you want to better understand how the different types of shop insurance work and what they typically cover, see the definitions below.
Public Liability Insurance
Public Liability Insurance (PL) is a critical cover for shops because they have in-person exposure to customers and other third parties who can sue. PL insurance protects against accidental injury or property damage claims made by members of the public such as clients or even your landlord. Public liability covers the cost of any compensation and the legal expenses incurred in defending your shop.
While not required by law, given the exposure a shop has to the general public, paying around £100 a year for public liability insurance is certainly worth it—consider that the average public liability settlement was £13,500 last year, but costs can be much higher. Product liability is usually sold together with public liability and covers injuries or illnesses caused by products you design or sell.
Employers’ Liability Insurance
Employers' Liability Insurance will be a legal requirement for nearly every shop in the UK, as this coverage is mandatory for any business that employs staff. It ensures you are protected against any injury and illness claims made by employees and will cover both your legal defense fees as well as any compensation you're found liable to pay.
Business Contents Insurance
Most shops will want Business Contents Insurance to protect financially against the loss, damage or theft of valuable stock (this might cost an extra premium, dependent on the value of your stock), fixtures, fittings, displays, decoration and even employees' personal possessions that are left in the shop.
In addition, shop owners might want to consider personal accident cover, business interruption insurance, business equipment (e.g., computers), legal expenses, and more. When you're getting quotes, you'll typically be able to add on these extras if you need them.
ShopKeeper Pay and Market Statistics
| Working in Shops | Overall Number of Jobs | Median Overall Pay | Median Full Time Pay | Median Part Time Pay | |
|---|---|---|---|---|---|
| Shopkeepers and proprietors | 10,000 | £25,076 | £27,582 | £14,180 | |
| Sales assistants and retail cashiers | 1,134,000 | £11,363 | £18,200 | £8,752 |