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Shop insurance supports businesses when the unexpected happens

A tailored insurance policy will make sure your shop is protected from a range of losses, including fire, flood and shoplifting
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Last updated
December 13th, 2023

What is shop insurance?

Shop insurance can protect your business from the various hazards or claims you might encounter. These risks include damage to the property from your customers or employees and theft of stock. This insurance can also provide cover if you have to close the shop due to flooding or facing a claim from a customer about an item you’ve sold them. 

It’s important to find insurance for shops that is tailored to your business, as this will make sure you can continue to trade. 

It’s worth knowing that if you employ any temporary or permanent staff (other than immediate family) it’s a legal requirement to have employers’ liability insurance. If an employee falls ill or is injured in the workplace this insurance ensures you’re covered. 

The other types of insurance aren’t legal requirements, but at least some will be important to consider if you want to protect your business. 

Insurance can cover you if there is theft of stock or damage to your premises.”

How does shop insurance work?

Shop insurance works by protecting your business if something goes wrong. 

With retail insurance in place, you can claim for compensation if your business suffers from loss or damage. This is important because if the worst happens it can be very costly to your business. 

For example, if stock is damaged or goes missing from your shop, you can make a claim to your insurance provider for compensation. You'll need to give details of what's happened so it can be assessed, and should be prepared to hand over stock purchase price details. You'll then find out what compensation can be offered.


The number of retail outlets in the UK[1]
317,005

Should I get shop insurance?

You’ll know your business inside out, so you should be aware of any potential risks that may face your shop. If you don’t want to be kicking yourself because you ignored a potential risk, then retail insurance is a good idea. 

The key is to make sure you get insurance that is tailored to your shop and its needs, as this will be the most effective. For example, it would make sense if your shop sells portable items that are desirable to thieves, as is the case with many high-street outlets. 

The sharp rise in cases of shoplifting has been well publicised, with the Office for National Statistics reporting a 22% increase in shoplifting incidents. With shop insurance you would incur less of a financial hit should your outlet get targeted.


Cost of theft for British shopkeepers in 2022[2]
£953million

What does shop insurance include?

Public liability insurance

This covers injury or damage caused by your business to a third party or their property. A third party is typically anyone not employed by your business.

Professional indemnity insurance

Can cover legal fees and compensation costs if a mistake in services of advice offered by your shop cause a client or customer to lose money.

Business contents insurance

This type of insurance covers possessions and stock within your shop in the event of damage, theft, fire or loss.

What does shop insurance include?

Public liability insurance

This covers injury or damage caused by your business to a third party or their property. A third party is typically anyone not employed by your business.

Professional indemnity insurance

Can cover legal fees and compensation costs if a mistake in services of advice offered by your shop cause a client or customer to lose money.

Business contents insurance

This type of insurance covers possessions and stock within your shop in the event of damage, theft, fire or loss.

How can I choose the right shop insurance?

Choosing the right insurance is an important part of running your business successfully, so here are some key points to consider.

Identify the cover you need

Look at what you would like to cover in your shop and then identify the different levels of cover to decide how much protection you need.

Compare policies

As with all insurance, the level of cover is more important than the price. Cheap shop insurance might prevent your business from being fully protected. Take the time to consider coverage limits, exclusions and premiums.

Review documents

Don’t sign along the dotted line until you’re sure the policy you’ve chosen has the cover you need. Read all the documents in detail and don’t hesitate to contact the provider if you have any questions.

How much does shop insurance cost?

The cost of shop insurance will vary depending on the logistics of your business. For example, the cost will take into account: 

  • The size of your shop

  • The value of your stock

  • Its location

  • The number of staff

  • Whether you have any licensing requirements 

Most shop insurance starts at £12.95 a month, but the price can vary quite a bit – with factors such as the covers you choose, your location, employee count and turnover affecting how much you’ll pay.

Here are some real-life examples of quotes for shop insurance:

FactorsScenario 1Scenario 2Scenario 3
Number of Employees*139
Turnover£50,000£50,000£850,000
Product and Public Liability£2,000,000£2,000,000£5,000,000
Employers' LiabilityN/A£10,000,000£10,000,000
Commercial Legal ProtectionN/A£100,000N/A
Business EquipmentN/A£5,000N/A
Monthly Cost£12.95£21.96£61.64

10% of shops paid £12.95 a month or less for their business insurance between April and June 2023.

These are real quotes given to Superscript customers for shop insurance.

*Including employer

Each business presents its own set of risks and a unique profile, making insurance premiums highly variable. Use these figures as a guide only — you may receive quotes that are significantly higher or lower.

What to consider when looking for shop insurance?

There’s no one-size-fits-all retail insurance because different types and sizes of shops will vary in what they need protecting. 

Large stores are more likely to employ lots of staff – who could get injured onsite. They will also usually have a high customer footfall, and a higher turnover than small outlets. All of these factors add to the level of risk to the insurer, which is reflected in the premium. 

Location also has a role to play. If you work in an area with a lot of crime, you can expect the cover to cost more than if you were based in a village with minimal crime. This is because your business is seen as being a higher risk. For example, if you’re burgled, you might need to claim for loss of stock and for business interruption during the period you were closed to customers. If you are based in a crime hot-spot, you’re more likely to be repeatedly burgled. 

Likewise, if your business is located on a flood plan rather than on higher ground, your risk of making a claim for loss of stock due to water damage.

All these elements will reveal themselves not just in the quote, but also in limits of cover and the excesses you would need to pay if you claimed. 

Learn more about our business insurance partner

Superscript Logo Full 2x

We qualify, quantify and offer insurance using data, analysis and technology, and we serve a wide range of business types — from dog walkers and dieticians, to landlords and locksmiths. Enro Ltd t/a Superscript is authorised and regulated by the Financial Conduct Authority.

Why Superscript?

We make it quick and easy to find, buy and manage your business insurance.

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Customisable cover for 1000s of business types
Superscript will help you find the different types of cover that are right for your business.
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Adjust your cover as you grow
Amend your cover with no admin fees, to address your evolving needs as your business grows.
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Simple claims process
Our customer portal allows you to enter the details we need to get your claim processed.

FAQs

Is it a legal requirement to have shop insurance?

It's usually a legal requirement to have sufficient employers’ liability insurance if you employ members of staff, but the rest is up to you.

What insurance do you need for an online shop?

Shop insurance is normally for businesses that are run from a commercial property, but you can also get insurance for your online shop. Cover will be similar to what we’ve discussed above, but is likely to also cover the additional risks you face when selling online.

Do I need public liability insurance?

Your business will revolve around members of the public, so public liability insurance is a good idea. This type of insurance can pay out if a claim is made against your business - and claims can be costly.

About the author

Lucinda O'Brien
Lucinda O'Brien has spent the past 10 years writing and editing content for regional and national titles. She applies her industry knowledge to ensure readers can make confident financial decisions.

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Footnotes

1. Number of UK retail outlets Reported by RetailEconomics based on 2022 ONS data
2. BRC Crime Survey 2023 Cost of theft for British shopkeepers in 2022