Shop Insurance: Everything You Need to Know

The increasing cases of thefts and burglary creates a huge risk for shopkeeper’s business. Their shops are also at risk due to man-made disasters like riots, strikes, terrorism activities, etc. The natural disasters like earthquakes, lightning, and floods, can also result in major financial losses. To counter all these losses, shop owners have started insuring their property and contents of the shop nowadays. The insurance policies that are applicable to shopkeepers are known as shop insurance or shopkeeper’s insurance

What is shop insurance?

Shop insurance is a comprehensive insurance plan that safeguards the structural damages from both natural and man-made disasters. It also provides protection against theft of products, cash, and other types of frauds. It not only provides coverage for the money kept in the safe/locker but also covers the losses due to cash thefts during transit. For example, if you were carrying the cash from the ATM to the shop and a thief stole your cash, you can claim the shop insurance policy

Most insurance companies also provide a personal accident cover with shop insurance. The personal accident cover includes compensation for the bodily injuries resulting in permanent disability or death of the insured. The public liability cover is also included which protects the policyholder from the instances like accidental damage, bodily injury/death, and property damages of a third-party (excluding the resident employees and staff). 

Why should shop owner’s get shop insurance?

The retailer shop owners have shops as their sole income source. Therefore, they cannot undermine the risks associated with this business as fires, explosions, burglary, and other fraudulent activities occur frequently these days. The property, service-related equipment/products, appliances, cash and equivalent assets are at risk when the shops are not operational. To cover the shop owners from these types of risks, insurance companies have come up with shop insurance plans

A shop insurance policy not only provides coverage from fire and related perils but also protects the cash and property of the shopkeeper. They protect the financial interests of the shopkeepers from the unprecedented events. Therefore, getting it secures shopkeepers from all kinds of worries. 

Key Features of Shop Insurance 

  • Wide coverage: A shopkeeper’s insurance provides a wide coverage for the perils and risks that small and medium-sized businesses are exposed to. It provides protection to the property and the financial losses incurred due to natural and man-made disasters. 
  • Additional cover: Additional cover for personal accident, public liability, and employer’s liability cover is provided by a shop insurance policy. A legal liability cover can also be availed to cover the legal liabilities claimed by a third-party for any bodily or property damages inflicted on them within your business premises. 
  • Protection of electrical & electronic goods: CCTVs, computers, TVs, printers, and other electrical and electronic appliances installed inside the shop are protected by this insurance policy. 
  • Fidelity cover: If any of the employees engage in dishonest acts or forgery, the shop insurance will cover all the financial costs incurred due to these acts. 
  • Customised coverage: A shop insurance policy can be customised according to the requirements of the shop owners. The premium and coverage can be chosen according to the business type and requirements. 
  • Easy subscription and claim procedure: Most insurers offer an online application process that helps shopkeepers get the insurance conveniently. The applications are processed with minimal documentation. The insurance renewal and claim procedure can also be done online these days. 
  • Loss of rent: A shop insurance plan also provides coverage for the loss of rent suffered by the owner due to any incident or event. If the business has to be shifted temporarily to a new location due to natural or man-made disasters, the rent for the alternate accommodation is covered under this policy. 

Characteristics of Shop Insurance 

  1. Add-on covers: You may also get some additional coverage with the shop insurance policy to safeguard your business from all the risks. For that, you only need to pay an extra premium. Some of the popular add-on covers that shopkeepers get with shop insurance is earthquake insurance, escalation cover, and terrorism cover. 
  1. Shop insurance premium calculator: Calculating the sum insured and premium required to insure a business can be a time-consuming task. To make this task simpler, insurers provide a shop insurance premium calculator on their official website. With the help of this calculator, you can easily calculate the premium by providing details like cost of stocks stored inside your shop, property cost, baggage cover, money insurance, and other the other types of cover you need. If you subscribe to add-on plans, the premium displayed on the calculator will automatically increase. 
  1. Business interruption coverage: Coverage for business interruption is generally included in shop insurance. It covers the loss of income and other expenses incurred due to business interruptions after a fire, burglary, or any other event. The accountant fees incurred to evaluate the losses are also covered in this policy. 
  1. Single policy for chain of stores: Some insurance providers allow shop owners to cover the chain of stores they own under a single plan. However, they need to declare the addresses/locations of all of their shops and mention the sum insured required to insure each shop separately. 
  1. Coverage for primary items: Most shop insurances cover the primary items or stocks of the shop. Suppose that you sell stationery items but have a couple of laptops in your shop to look after the invoices and other matters. In this case, a regular shop insurance policy will only cover the primary items i.e. stationery items and not the laptops. 

Types of shop insurance 

Retail businesses can consider these types of shop insurance plans:

  1. Buildings insurance: It protects the property from events like fire, explosion, floods, thefts, and riots. 
  1. Business content cover: It covers the interior fixtures and furniture, fittings, electrical appliances, machinery, and computers placed inside the shop premises. 
  1. Employer’s liability cover: It covers the incidents like employee injury or sickness diagnosed while working in the shop. 
  1. Public liability cover: The events that cause bodily or property damage to a third-party are covered by the public liability cover. It also includes cover for accidental death of a third-person inside your shop premises. 
  1. Online shop insurance: It protects an online business from cyber threats and attacks. 
  1. Goods in transit cover: This type of shop insurance policy can be availed by shops and businesses that indulge in transport of goods on a daily basis. It also protects the goods from the damages while they are being delivered by courier and post. 

Shop Insurance Plans Available In India 

Policy NameSum Insured Policy PeriodKey Features 
Shopkeeper’s Insurance Policy by Digit InsuranceAs per the business and coverage requirements 12 months The option to cover either the property or the contents or both. 
Fire, explosions, natural disasters, thefts, terrorism, and other unprecedented events are covered by this policy. 
The option of customising the sum insured as per the business nature and size is available.
Only claims above Rs. 1,00,000 are inspected physically by officers.
Quick online settlement of claims
Covers all business categories 
Shop insurance policy by ICICI Lombard As per the business and coverage requirements 12 months Covers fire, burglary, money in transit, fidelity, and marine transit of goods. 
Personal accident cover, public liability, employer’s liability, and other covers are available.
The option of availing add-on covers like earthquake, escalation, and terrorism cover are available.
Shop Insurance by TATA AIGAs per the business and coverage requirements 12 months Standard fire and perils coverage for shops
Add-on covers for debris removal costs and architect surveys are offered at no cost! 
Loss of rent, terrorism cover, alternative accommodation rent cover, and other add-on covers can be availed by the policyholder. 
Portable equipment like laptops are covered by this policy.
Plate glass, and neon sign coverage are included in the policy.
Personal accident cover, baggage cover, fidelity, and public liability cover are also included in this shop insurance plan
Shopkeeper’s Insurance Policy by General InsuranceAs per the business and coverage requirements.12 months Quick policy issuance
Simplified claim process
Unique packaged plans as per the business categories 
Fire and allied perils are covered 
Mechanical and electronic appliances along with personal accident cover is provided to the policyholder. 
Shopkeeper insurance policy by Oriental InsuranceAs per the business and coverage requirements 12 months Fire, housebreaking, money, baggage, personal accident, fidelity, public liability, and many other types of coverage are included in this shop insurance plan
Business interruption cover is also provided to the insured. 
Not suitable for all types of businesses
Terrorism cover is provided to the policyholders at an additional premium.
Shopkeeper’s insurance policy by UIIC (United India Insurance Company)As per the business and coverage requirements12 months Money in transit, pedal cycles, plate glass, neon sign and glow sign, baggage cover, and accidental injury are covered by this policy. 
Ideal for small shopkeepers 
War and related perils, nuclear perils, consequential losses like wear and tear damage, etc. are not covered by this policy. 

Inclusions & Exclusions Under Shop Insurance 

What’s covered?

  • Shop insurance covers the items of your shop from thefts and damages. This cover provides the complete replacement value if any of your stocks get damaged or stolen. 
  • Damage caused to fixed glass and sanitary fittings during burglary, natural, or man-made disasters is covered under the shop insurance policy
  • Damage caused to the raw materials, manufactured goods, and packaging material in transit is covered by this policy. 
  • Shop insurance covers thefts or damage of portable equipment like laptops due to any natural or man-made disasters. 
  • The loss, damage, or destruction of personal baggage carried by the insured while conducting the shop’s business is also covered by this policy. 
  • Any bodily injury resulting in death or disability of the employees caused by an incident is covered by this policy. 
  • Shop insurance covers the public liability and provides fidelity insurance to cover the losses caused due to frauds or dishonest acts of the employees. 

What’s not covered?

  • Damages or destruction caused due to war, pollution, nuclear wastes, and similar events are not covered under a shop insurance policy
  • Shop insurance does not cover damage caused to equipment and appliances due to gradual wear and tear. If any of the machinery or equipment is defective while issuing the insurance, those machinery or equipment are not covered under this policy. 
  • If the electronic appliances or equipment suffer damage while cleaning, repairing, or restoring them, then such costs are not covered by this policy. Breakdown of equipment or machinery due to negligence or willful act is also not covered under the shop insurance
  • Monetary losses or damages caused by employees by using duplicate keys or by using fake currency are not covered by this policy. Coverage to glass fixtures and signboards damaged due to scratches and cracks is also not included in shop insurance plans
  • Personal injury caused under the influence of alcohol or drugs is not covered by a shop insurance policy. The same goes for bodily injuries sustained due to suicide attempt. 
  • Public liability caused due to not obliging to statutory provision or due to intentional errors are also not covered under this policy. Fines, punitive damages, and penalties are also not covered under shop insurance
  • Coverage to loss or damage of baggage due to electrical breakdown is not included in this policy. 
  • If a family member is involved in a damage or loss due to burglary, then such events are not covered by this policy. 
  • Coverage to bodily injury sustained while playing sports or indulging any hobbies is not included in this policy. 

Who can buy shop insurance?

Independent shop owners who run a shop to meet their ends must get a shop insurance policy. It is also applicable to shopkeepers who own multiple shops. In this case, the shopkeeper will have to get a separate insurance policy for each of his shops. 

Businesses that sell clothes, furniture, stationery items, or any other family business can get this policy. It is more relevant to shops that are located in prime locations. It is so because the prime locations are more susceptible to burglary and damages caused during riots, strikes, and other man-made disasters. 

High-risk businesses like the shops selling gold, diamond, or any kind of jewellery must think of getting this insurance. In short, any shop owner who wants to insure his property and physical assets kept inside the shop must buy shop insurance online. These types of shop owners usually get a shop insurance policy:

  • Mobile and electronic shops
  • Offices and educational institutions 
  • Gyms, malls, salons, beauty parlours, spas, massage centres, etc. 
  • General stores and groceries 
  • Manufacturing processing units 
  • Food outlets like cafes, restaurants, food trucks, and more
  • Garages, home repair services, plumber shops, carpenter shops, etc. 
  • Health care centres, clinics, diagnostic centres, pharmacies, and hospitals

Things to consider while getting a shop insurance policy

  1. Evaluate all the risks involved: Before buying shop insurance online, you must evaluate all the risks involved in your business. You should analyse whether your business is located in an area that is prone to earthquakes, floods, and other types of natural disasters. You must also evaluate whether fires, riots, burglary, and other types of man-made catastrophes are common in the area where your shop is located. 

Finally, you must consider the risky items or stocks stored in your shops for selling or rendering services. For instance, if you run a salon, your shops must contain mirrors, razors, blow dryers, and other delicate items. Therefore, you must buy shop insurance that provides enough coverage for all these items. 

  1. Coverage for valuables: Valuables like furniture, electronic appliances, expensive paintings, artefacts, or artworks, etc. also need to be insured. 
  1. Self coverage: While insuring the shop items and valuables, many shop owners forget to cover the main asset of their shops i.e. themselves. Therefore, they must get a shop insurance policy that also covers the policyholder from accidents, bodily injuries, and other damages. A personal accident cover and medical cover is generally included in a comprehensive shop insurance policy
  1. Loss of income: Any natural calamity or man-made disaster can interrupt the normal operations of a shop. The shop owners must consider the loss of income they may suffer due to these events. Therefore, they must get shop insurance policies that provide coverage for loss of income. The shop insurance plans must also cover the rent required to shift the business to a temporary location in case the primary location gets damaged or broken due to any disaster. 

When can you claim shop insurance?

Any event or disaster that results in damage to the property or stocks of the shop should be immediately reported to the insurance provider. The resulting loss due the events would be easier to calculate when you claim the insurance immediately after a loss or damage. The following steps are to be followed to claim shop insurance:

Step 1: Inform the policy provider ASAP

The first and foremost duty of the insured is to inform the policy provider immediately after the loss or damage. A helpline number or email can be used to convey the details of the incident. Or else, you can connect with an online support team and inform them about the nature of the loss and the events that lead to the loss/damage. 

Step 2: Inform the police 

If a theft or burglary has taken place, you must contact the police and register an FIR for the same. The FIR copy will serve as an important document while filing for the claim. 

Step 3: Submit the claim form along with valid documents 

The next step is to fill the claim form and provide the supporting documents. Ensure that all the details are clearly described in the form. In case of any doubts, you can contact the support team and seek advice. 

Step 4: Inspection process 

After submitting the claim form, the insurer will appoint a supervisor who will inspect your shop for verifying the damage or losses incurred due to the events. The supervisor will prepare an inspection report which will carry all the details of the damage including the financial estimate of the losses incurred. 

Step 5: Wait for the procedure to be completed 

Once you have completed all the formalities, be patient and wait for the procedures to be completed from the insurer’s end. It may take a few days to a week for the process to be completed. Based on the inspection report, your claim will either be approved or rejected. 

Documents to be submitted along with the form 

  • FIR copy
  • Duly filled claim form 
  • A list of stocks and equipment that are damaged 
  • Evaluation report 
  • Photographs of the damages goods and property 
  • Estimated insurance claim
  • Copy of the insurance policy 
  • Additional evidences or documents that validate your claim

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