Insurance For The Micro Retail Business
Your store may be your only source of income. It may be your inheritance or your children’s inheritance. Small business owners, whether they have a partner, a franchise, or are single-owners of a single store, need to ensure their livelihood. Today’s society is litigious, and business owners must realize that being sued is a real threat. A natural disaster is also an issue in parts of the country, whether the threat is tornadoes, hurricanes, earthquakes, or flooding. With all of the catastrophes, both man-made and natural that can wreak havoc on a business, it only makes sense to have a good insurance policy. But, what kind of insurance does the small retail business need?
How Much Insurance?
Typically, a small business needs about $1 million in liability. That seems like allot, but keep in mind that you need enough to replace your store and inventory, should there be a catastrophic event. Most insurance companies won’t write a policy for any amount lower than $25,000.
The type of retail store you have affects the amount of insurance you need. For example, if you don’t keep inventory on site, you will need less insurance. A clothing store, for example, may have $500,000 in inventory alone. A custom jewelry shop may have over $1 million.
Types of Business Insurance
There are four common types of business insurance coverage. They are:
- Business property
- Business liability
- Business income
- Business crime
- Workman’s compensation
Business Property Insurance
Business property insurance for small retail stores is crucial for protecting the physical plant as well as inventory. The physical plant consists of the store, its fixtures, including displays and slot-wall, and all equipment.
Damage to the structure is covered by business property insurance. Fire, windstorm, and other events should be covered by your policy. They should be prepared to pay quickly so that you can rebuild and get back in business, reducing loss of income.
In addition, any personal property you have involved with your business should be covered by your policy. So, any computers, equipment, or tools should be under the blanket of your policy.
Business Liability for Small Retail Business Owners
Make no mistake – there are people out there who pay their bills by claiming injury at businesses. Whether the injury is fraud or not you need liability insurance. Someone can slip or be injured by something you have sold them, and you may be liable. At the very least, you may have to go to court to prove that you weren’t liable. This costs money. You could be sued for damages for:
- Physical injury
- Financial damage
- Psychological stress
- Needs for continuing medical treatment due to one of these factors
- Unfulfilled promises that were in the business contract
Anything that might cause a customer or employee to seek medical treatment can put your liability insurance to work for you.
Cyber liability also comes under your insurance coverage. With all of the scandal of hacked computer systems in the U.S. today, you need coverage that can pay damages. Most insurance policies also provide forensic help in tracking down stolen information.
Liability insurance also covers people. You may have a manager, employee, or director who could be targeted in a lawsuit. This is a popular trend. Also, one of these people or yourself may be targeted for harassment or wrongful termination.
Your business liability insurance will pay for legal representation and investigation in all of these cases. It will also pay damages if any are awarded to the plaintiff.
Business Income Insurance for Small Retailers
Large corporations may have the resources to weather loss of income at one location. But, small retailers can face bankruptcy after a catastrophic event. Property insurance will put your business back on the map, but your loss of income can be crippling. This type of coverage will provide you with an income during the repairs. But, it can also provide a payroll, so that you don’t lose valued employees. Extended Coverage for Business Income will provide benefits for a longer time, should you need to rebuild your clientele after repairs have been made.
Any business owner must concern himself with losses whether within or outside of the company. All too often, employees steal from their employers. When this happens, your business crime insurance can save the day.
An employee may steal cash, inventory, or customer identities. If you are sued by a customer because their information was stolen, your liability insurance may cover the legal wrangling. But, you need coverage for the actual money that was taken. Business crime insurance for micro retail stores can keep your business afloat.
Worker’s compensation insurance is required in every state. This will cover the medical treatment for injured employees, as well as some compensation for lost wages. You will need additional liability, though, to protect yourself from lawsuits.
Ask your insurance agent for a BOP, or Business Owner’s Policy. This will provide a discount by bundling your policies into one package.