If your new business venture is a shop, pub or restaurant, there are a number of unique risks you will need to insure against.
Unlike an internet-based business or one run from an office, you will have greater contact with the public. And in the legally-aware society we live in, that exposes your business to a greater risk of being sued.
Before you sign the lease on your first premises, use this guide to the insurances you may need.
Why you need to be covered
The whole point of retail premises is to get customers into your shop or restaurant and buying things! But having customers tramping through the aisles is a risk. If there’s a box they could trip over, they will. If something could break and hurt them, it will. You might even find your business targeted by a scammer, who “accidentally on purpose” trips over something in store and makes a claim.
And if the customers aren’t risky enough, there are the employees. Retail and catering needs them to lift stuff and handle hot things. The risk of them being injured at work is higher. And because there is more likely to be a lot of cash on the premises, you are more open to employee fraud.
Finally, the premises themselves are your source of revenue. If you lose them you need protection to ensure your business survives, and is back up and running again quickly. Unlike a business based in an office, you can’t just work from home or a hotel.
These risks are nothing to be scared of; thousands of shops and restaurants successfully manage them each day. Here are the main types of insurance you can use to protect yourself.
Employer’s liability insurance
This is required by law as soon as you have your first employee, and has been since the 1960s. You are responsible for the health & safety of your staff at work, and may be held to be at blame if they are injured at work, or fall ill as a result of something they have done there.
Your employers’ liability insurance ensures you can meet any compensation claims.
Of course, having this insurance doesn’t mean you can ignore health & safety risks at work. You are duty bound to ensure employees don’t get hurt. This can be as simple as training them to lift heavy items properly, or if they must use a computer regularly, ensuring they have a suitable chair to sit correctly.
Public liability insurance
This is a voluntary insurance, but it’s a false economy not to get it. If a customer does have an accident on your premises, no matter how small, the legal fees alone could cripple and destroy your start-up business.
Having public liability insurance will help you sleep at night! The price generally depends on the type of business you run, your turnover and the number of employees. For more details, read our guide explaining what public liability insurance is.
If you’re in the fortunate position of owning your premises rather than renting them, you will need to protect the building – just like you do your home.
Buildings policies tend to be compulsory when you take out a commercial mortgage, and are highly recommended. You don’t want to be the owner of an uninsured pile of rubble!
Contents and fittings insurance
This is highly recommended, again to give you peace of mind. It will ensure the contents of your retail premises including the fittings are covered in the event of a crisis.
Let’s say you are renting a unit and it burns down – the owner’s building insurance won’t cover the cost of replacing your fittings and furniture. Your business will need its own policy for that. It’s not worth the risk of not having it. It could be a nasty surprise when you learn how much it would cost to replace all of your fittings in a hurry.
And it’s sensible to protect the stock too. At any one time you may have tens of thousands of pounds worth of stock. If it’s destroyed or stolen, has your business got the financial resources to replace it quickly? A shop, pub or restaurant without stock isn’t a viable business.
The nature of running a retail business means you are more likely to have a lot of cash on site. People prefer paying with cash for small transactions, and it can soon add up to a lot of money in your till or safe.
A cash cover policy will protect your business from a thief taking the cash. Some policies will even cover you while you take the money from your shop to the bank.
You can also extend protection to get the cash back if it’s taken by an employee. This is highly recommended. While most employees are trustworthy, it only takes one bad egg tempted by the amount of cash around to start siphoning off a few pounds every day. Over a number of months this can seriously affect your business.
Other types of business insurance
ByteStart has a series of practical guides to help yuo get to grips with the various types of business insurance you may want to buy, including;
- ByteStart’s Guide to Professional Indemnity Insurance – What You Need to Know Before Buying Cover
- Which Types of Insurance Must Your Business Have?
- A Guide to Income Protection Insurance for Sole Traders and Start-Ups
- Guide to Intellectual Property Insurance for Start-Ups and Small Businesses
- What to do if Disaster Strikes Your Business Premises and You Need to Make an Insurance Claim