New Zealand has traditionally thrived on small businesses like cafes, clothing stores, high street shops and food retailers.
For the average small business, managing risk is essential to long term business continuity. Some of the more concerning risks include events that could damage your stock, limit your ability to sell or affect your income from sales. Some of these events could include:
The right kind of insurance ensures that risks are managed in a way that is least harmful to the business. So if your shop is broken into you will want to be covered for the damage caused by the break-in as well as the stolen or damaged stock. If you’re worried about this kind of situation slowing your business down or affecting your profit, you can get cover for that too, in the form of business interruption insurance.
Call TOWER on 0800 379 372 to talk to a business specialist and get a free review of your current business insurance. Alternatively click here to request a quote.
Types of Insurance for Retail Business
There are three types of insurance that are important for retail businesses:
If your business owns or uses a car or van, you should also consider commercial vehicle insurance.
Business Assets Insurance
Business assets insurance can provide cover for your physical assets. This includes your stock, your premises, and contents within the premises such as computers, laptops or cash. Business assets insurance can cover the replacement or repair of your insured contents (except stock) that are within the business premises (but it doesn’t usually cover shoplifting). In the case of the keys to your premises being stolen or copied without your permission, this insurance can provide cover to replace your keys and locks too.
E.G. A big storm damages the roof above your coffee shop store room. All your stored imported coffee gets drenched and is damaged beyond repair. Not only will you need to replace the damaged goods but you also need to have the entire store room professionally cleaned to get rid of the coffee stains. On top of that the roof needs to be fixed. Business assets insurance can cover the cost of fixing the roof and the professional cleaner.
Business Interruption Insurance
Business interruption insurance is essential for times when business can’t continue due to your business assets being damaged or stolen. Business interruption insurance can cover situations such as repairs being carried out to a burst water main close by which blocks access to your shop. Similarly if your block of shops is badly damaged by a flood or fire, and you cannot trade until the premises are repaired, business interruption insurance can provide cover for your loss of profits. Should your sales be reliant on receiving specific stock from suppliers, it is also good to know that business interruption can provide cover if your stock is damaged at your supplier’s premises - which means you cannot continue trading.
Liability Insurance
Liability insurance is important for a variety of reasons. Depending on your situation you may require general liability cover, employers liability cover and/or statutory liability cover. If your business has employees, then consider employers liability insurance. General or public liability is a ‘must’ for most retailers. General liability provides cover in situations where other people’s property is damaged as a result of your business’ actions. Often retailers based in shopping malls in New Zealand have to take out $5million or $10million worth of general liability cover before their contract/tenancy will even be approved.
E.G. One of your employees accidentally causes a fire in your shop. Not only does the fire damage your own premises, but it also causes smoke and fire damage to neighbouring shops and their stock. General liability insurance can provide cover for your legal costs and the repair/replacement costs incurred by the neighbouring business owners, associated with this unfortunate event.
Business Checklist
Find our if your current business insurance is really what you need - go through our 10 point checklist for retailers here >>