Ask an Expert

Do I really need specific commercial insurance?

Sometimes unavoidable accidents happen and events occur beyond our control. The retail sector is often busy and frenetic and accidents can happen no matter how many precautions you take. If you are based in a shop or travel with stock on board the risk of losses are real. People often look at commercial insurance as an unwanted expense when in fact it is an investment in your business. Insurance may cost you but if your stock was stolen or destroyed the payout you would have to make would be more than the cost of your premiums! By protecting your expensive stock you can rest assured that if something goes wrong in-store or on the road it won't be you picking up the bill.

Can I protect myself when placing orders with suppliers?

If a large outlay has been made on stock and it doesn't turn up, is faulty or your supplier goes out of business you could end up making a loss which is why we advise filtering any new customers to check that they are a reputable and reliable company. In the event that damage occurs to stock that you have already invested in, through an insurable peril, whilst still in the hands of your supplier, you could be able to claim for Business Interruption for the sales you are losing out on but this is often an add on to the policy so check your details carefully.

How can I protect myself against theft?

Unfortunately thieves are at work in all areas, in all industries, and with tack shops often holding vast quantities of expensive and desirable stock, they are often an easy target. From an insurance point of view theft is generally a standard peril included with all Commercial Combined or Shop policies – unless it has been specifically excluded. Theft may be excluded until you adhere to a particular term or condition of the policy. Don't just assume you are protected – always check with your insurance company or broker. Theft tends to be opportunistic, therefore as a business it is important to put certain financial protections in place such as insurance to ensure full compensation in the event of a break in. It is also very important to apply physical protections to reduce the chances of a thief seeing the opportunity in the first place, in some cases an insurance company may exclude theft until certain protective measures are put in to place, such as an alarm.

Is there a limit to the amount I can claim for in the event of theft?

It has become more and more common for insurers to put a limit on theft. They do this by stipulating that in order for theft to be covered there must be signs of a violent and/or forcible entry or exit of the premises. This has historically been applied to premises that are at higher risk and have poor physical security. However, with the increase in problems occurring it is becoming more commonplace to be applied to conventional policies. Sometimes getting the cheapest policy does not mean you are getting the best cover, in fact when it comes down to commercial insurance, it is often false economy to pay a lower premium because it can reflect the quality of your cover, this is why it is imperative that you check your policy wording carefully.

Are there any security measures I need to take out to ensure I am fully protected in the event of a theft?

Having good physical security will help reduce chances of a break-in occurring and potentially get you a discount in premium. Most insurers insist on minimum security requirement of 5 lever mortice deadlocks on all external doors and key locks on all windows, and may required higher levels of security such as Police Response alarms in the case of high sums insured. There is however some exceptions and some insurers will take into account additional security measures in place should a client fail to comply with the minimum requirements such as metal roller shutters and/or alarms etc.

Is there anything that is not covered in a standard policy when it comes to theft?

Petty pilfering can be covered on your insurance, however it should be noted that an excess of between £100- £500 would apply so depending on the item stolen it may not be worth claiming for. This is not always automatically covered so always check your policy wording. There are ways you can minimise the risk of petty pilfering or shoplifting such as positioning more expensive items in view of staff, keeping a close eye on customers visiting the shop and installing additional security measures such as CCTV cameras. There are also optional extensions to cover theft by employees, known as fidelity guarantee, though this will be at an additional premium.

Am I automatically covered when at shows and events?

Depending on the insurer, cover can be extended for fairs and exhibitions under the shop policy but each case is looked at on a case-by-case basis. This would extend the public liability and employers liability for fairs and exhibitions as well as stock cover subject to an underwriter's agreement. There wouldn't necessarily be any security measures required as such, as the underwriter will make a judgment call based the information provided by the client and limits of cover required.

If something happens that is totally out of my control am I covered?

Both a Package Policy and a Commercial Combined Policy will cover you for fire, loss of documents, water damage, shop lifting and storm damage, etc and should pay out provided the loss has occurred due to an insurable peril. In the case of situations associated with weather such as experienced at the end of 2010 with the heavy snowfall, generally if you cannot gain access to your shop or premises and therefore cannot trade, this is not covered under a either policy type. However, should a long period of snow result in pipes freezing and therefore cause an escape of water claim, the resultant damage would be covered including tracing and accessing where the leak is coming from. Should you be unable to trade for that reason then business interruption will also come into effect. Another example would be should the weight of snow cause the roof to collapse this would be covered as it would be considered storm damage.

Is my stock covered when I am at a show?

When taking out a specific policy to cover yourself at shows it is important to bear in mind that your stock will only be covered during the event and when in transit to and from the event and this can be limited to a certain number of days. At all other times your stock should be covered under comprehensive business insurance. The value of your stock is based on cost price to the insured. Depending on which insurer covers them a company may band the stock or have an amount specified by the client. You should always notify your insurance of the length of time you will be away. These policies will also be subject to full details of security at the event. If you are a regular exhibitor at a number of shows throughout the year – more than three – it is worth taking out a multiple events policy which will save you a lot of money and administration.

What happens if someone is injured on my exhibition stand at a show?

Public Liability provides you with a cover for your legal liability to pay any damages, claimants costs and expenses which could arise as a result of a third party incident, for example, an accident to a member of the public on your stand. This will carry restrictions, such as restricted cover during the erection or dismantling of any stands or marquees, so always ensure you have read these carefully to avoid any problems should the need to claim arise. It is also vital that you have Employers Liability which would provide cover for any incident occurring to anyone you employ at an event, this needs to include anyone and everyone who could be helping out – even if it is voluntary.

I only do a couple of shows a year and hire the equipment, will my policy cover me?

If you are hiring or borrowing equipment for your show you can add on an element to your cover which insures you against any damage or theft. Event equipment cover will insure you for the loss of, or damage to any equipment you are responsible for during the event. This will not protect you if damage occurs due to defective erection or dismantlement of stands and marquees or through theft from an unattended vehicle. If you own the equipment be careful to ensure your insurance covers you for this as some companies would require you specify a replacement value for it on the policy.