Best Retail Insurance of 2024

Retail Insurance Coverage Levels	Basic	Extra Options
Commercial Liability
Commercial Property
Business Income
Product Liability
Workers' Compensation
Commercial Auto
Crime Insurance
Cyber Insurance
Commercial Umbrella
Employment Practices

Commercial general liability insurance

General liability insurance is one of the two most standard business insurance policies, along with commercial property. It’s sometimes abbreviated to CGL or just GL, for commercial general liability and general liability, respectively. 

General liability insurance is fairly broad liability coverage that protects your business from bodily injury and property damage claims that you’re responsible for due to your business’s negligence. If a client or another business gets physically hurt, injured, or damaged by an accident and your business is involved somehow, this policy will pay for the cost of the other person’s injuries and property damage. 

Commercial property insurance

Commercial property can include the building that you operate in, but it can also mean any business contents or equipment that you use specifically for your business. It can also mean stock and inventory. So even if you’re an online-only retailer, you could still benefit from having commercial property insurance. 

With most insurance companies, you don’t need to insure a building in order to insure the contents of your business. This type of coverage is normally referred to as business personal property or BPP for short. BPP coverage can include furniture, computers, and office supplies. 

Here’s a brief overview of each type of loss settlement option:

• Actual cash value. Often shortened to ACV, this type of loss settlement insurance is the cheapest, but will also pay out the least amount of money if you have a claim. It factors in the age, condition, and depreciation of your property when arriving at a dollar amount for your claim. 
• Replacement cost. This pays for the cost to repair or replace your property with similar kinds and quality of materials. It’s what most people expect to receive when they pay for insurance. 
• Functional replacement cost. This option isn’t always available with every insurance company, but it’s essentially a combination of replacement cost and actual cash value. 
• Agreed value. This is similar to replacement cost coverage, but agreed value is an amount that both the insurance company and the client agree upon. 

Business Owners Policy

You can think of a business owners policy, or BOP, as the business version of a homeowners insurance policy. It’s a combination of various commercial insurance coverages into one policy. It typically includes both general liability and commercial property coverage. 

Taking a Look at a BOP vs. Commercial Insurance

Most commercial insurance policies are bought a la carte. The final group of policies is often referred to as a commercial package policy, which could include general liability, commercial property, commercial auto, etc. For businesses that don’t need commercial property insurance, their package policy might just include general liability and commercial auto. 

Having each commercial insurance policy separate enables the insurance agent to pick and choose what’s important and necessary for each business. If your retail business is small and you want property coverage, you’re probably going to find the best coverage and rates with a BOP. If you own a large retail business or don’t want property coverage, you’ll be better off with a commercial package policy. 

Workers compensation

Unless you’re operating an online-only retail business out of your home, you probably have some employees. Workers compensation insurance is often required by each state, though some small businesses aren’t legally required to carry it. 

Even if your business only has a few employees and might not be legally required to have workers' compensation, it’s almost always a good idea to buy it. Workers comp covers the cost of workplace injuries and illnesses suffered by your employees. 

Your workers compensation rates will mainly be determined by your payroll, your workers comp loss history, and the exact nature of your retail business. If you’re operating a large warehouse with dangerous equipment in it, your workers' comp rates will be quite a bit higher than if you just have one employee operating a cash register. 

Other Retail Insurance Policies to Consider

Whether your retail business qualifies for a BOP or goes the a la carte commercial package route, your business may benefit from many other insurance policies. Not every retail business will need all of the following types of insurance, but these can be useful for many of them. 

Commercial auto insurance

If you’re using vehicles as part of your retail business in any capacity, chances are that you at least need hired and non-owned auto coverage. If you don’t have any vehicles that are owned and operated by the business, you can add hired and non-owned coverage to your general liability policy. 

If you do have vehicles that are owned and operated by and for your retail business, then you’ll need a commercial auto policy. There are various levels of commercial auto insurance that offer varying degrees of coverage.

Retail business income insurance

Business income insurance is sometimes called business interruption insurance, but it’s the same thing. It kicks in only if you have a covered loss but will then pay an average of your monthly income if you have to shut the doors to your store. Business income can make the difference between staying in business after a loss or having to close permanently. 

If you’re on a BOP, chances are good that your BOP policy automatically includes coverage for lost income. If you’re on a commercial package policy, you may need to add this coverage separately. 

Employers liability insurance

Employers liability insurance, also called employment practices liability insurance or EPLI, is never automatically included in a BOP. It’s a type of insurance that's similar to workers compensation and can be important coverage for retail businesses with many employees. 

Employers liability covers your business for things such as: 

Employers liability insurance is an often-overlooked insurance policy that can end up being very costly for a retail business if they have a claim without insurance coverage. 

Crime insurance

If you have a BOP, crime insurance is another thing that will probably be included with varying coverage limits. Otherwise, it’s a separate policy that you can add to your commercial insurance package. 

Crime insurance covers you for theft of money and securities by both criminals and your own employees. It also covers you for things like receiving counterfeit money, fraudulent money transfers, and forgery of documents. 

Errors and omissions insurance

Errors and omissions insurance, or E&O, gives liability coverage for professional services and advice. If your retail business engages in these activities, then you probably need this type of insurance, but if you’re only selling products, then you may not need it. General liability will cover you for injuries that could happen as a result of your completed or manufactured products. 

Cyber insurance

Cyber liability insurance covers your business against a variety of cyberattacks, such as malware and ransomware, hackers, or data breaches. Small businesses suffer the most from cyberattacks, as they are generally the most vulnerable. 

The costs of cyberattacks could include the cost to shut down and repair your online infrastructure and network, as well as paying for reputation damage control with your customers, which will be even more costly if any of their personal data is stolen or compromised. 

Commercial umbrella insurance

Commercial umbrella policies basically give you extra liability coverage in excess of your general liability policy’s limits. If your retail business exhausts your general liability limits, you’ll be completely on the hook for any additional liability claims you might have for the rest of the policy period until your general liability policy renews. 

Finding Discounts and Savings on Retail Insurance

As with most commercial insurance policies, you usually won’t find traditional discounts like you do on personal insurance, like personal car insurance or homeowners insurance. But there are still numerous ways to save on your retail insurance premiums. 

The only standard discount that may apply to a BOP or commercial package policy is a multi-policy discount. But even this discount doesn’t usually apply to any other commercial policy. It mainly applies to adding a commercial auto policy to your property insurance or BOP. 

If you don’t have a BOP, you still might be able to save quite a bit of money on your insurance by having a business that qualifies for credit. On commercial insurance accounts, insurance companies have the ability to put credit on your policy. The amount of credit can vary considerably, anywhere from 5% to 40% or 50%. 

Companies also want to balance offering low and competitive premiums with having enough premium to balance their books and account for potential claims, so you can’t always get a high amount of credit on your policy. 

The three main things that insurance companies will look at when applying credit to your retail business are:

Comparing Retail Insurance Plans

By working with a trusted and local independent insurance agent, you’ll receive multiple quotes from many reputable companies in the retail insurance world. Your agent will guide you through what each coverage option means and will recommend the appropriate coverage limits for your business. And if you do have a claim, you’ll have a trusted adviser by your side who can go to bat for you if there’s any problem with your claim. 

Frequently Asked Questions about Retail Insurance