Avoiding 4 Common Retail Business Insurance Claims

12 April 2022
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It’s a fact that retailers must be prepared for major setbacks when accidents, negligence, injuries, theft, or natural disasters occur. In the event of one or more of these, a business owner will often be held liable for losses, and insurance is your only means of protection from financial loss. Insurance may not be able to prevent these disasters from happening, but it can help you with carrying the costs after a disaster happens.

In this article, we will share with you the most common types of retail insurance claims:

1. Product Liability

Product liability’s main purpose is to cover legal costs and their damages when a defective product has been sold from your counter, because when this happens, it has the potential to cause injury and property damage.

If a product has caused injury or damage, legal battles can go far beyond the consumer and the business that had supplied the defective product. This creates a ripple effect on the entire supply chain and can make proceedings complex, lengthy and very. Claims, warranted or not, need to be quickly addressed as your company’s reputation and brand may be at stake.

2. Slips, trips and falls

When the doors to your retail store first open for business, everything is in place. As the day progresses, and your customers move items around, your retail store can go from organized to disorganized before anyone can even get to it.

Here are some basic practices to help prevent slips, trips and falls:

  • Make sure to check your store’s walkways, paths, and product shelves often to spot and reduce the risk of injury to your customers.
  • Have a checklist for your employees stating what must be done and when it must be done to ensure that they are properly maintaining your store. This works two-fold: it helps to keep your store safe from perils and keeps it tidy for your customers. It’s a win-win!
  • Always clean spills immediately and make sure to put up signs that the floors are wet.
  • Make sure that the exterior of your store has sufficient lighting and that you are prepared for the weather common in your area, putting out mats or fixating signage properly when necessary.

General Liability insurance can help your retail business in the event you’re being accused of causing injury or damage to your customer’s property.

3. Retail theft and shoplifting

According to the National Retail Federation, shoplifting, organized retail crime and employee theft are on the rise in the retail industry. Retail businesses are now losing more than $60 billion annually, due to theft and other retail shrinkages.

There’s no way to prevent all incidents of theft, but there are things that can be done to reduce your risks:

  • Establishing a retail inventory control system will allow you to track received merchandise and quickly identify missing items.
  • Putting electronic tags on all merchandise. This is a simple and effective way to prevent theft as it sets off an alarm when someone tries to walk out of your store before the tag is removed.
  • Make sure you have an adequate number of staff in your store. This helps to make it more difficult for shoplifters to slip items into their bags, clothing, purses or under their coats unnoticed.
  • An inexpensive, yet effective solution is to install a bell that alerts you and your staff when people enter or leave your business. This will help to ensure that you see who leaves without paying.
  • Set up security cameras inside your storage areas, store premises, and at the cash register to monitor employee and customer activity.

4. Weather and fire damage

Any business owner who leases or owns spaces for their retail business have the potential of having the building and contents damaged by weather or fire.

The National Fire Protection Association, shares that fire departments across the United States respond to an estimated average of 13,750 incidents of fires in retail stores and other mercantile properties each year. These retail claims are costly, causing more than $600 million in property damage. Here are some helpful tips to help prevent fires and severe weather damage in your business:

  • Inspect your property regularly, including the electrical system, and make sure you keep up with the required maintenance.
  • Always be prepared. Take precautions if severe weather is expected in your area.
  • Install a sprinkler system, especially in warehouses and stock rooms, where flammable merchandise might be stored.
  • Make sure fire extinguishers and fire alarms are working.
  • Ensure that staff are properly trained as to not block exits, alarms or sprinklers with products or equipment.

If your business property is damaged during a covered event, commercial property insurance can help with the costs and if you are a retail business and would like to learn more about how you can get the optimal coverage for your business, contact Inszone Insurance today!

Chris Tracy - Inszone Insurance Commercial Sales Team Manager

Chris Tracy

VP – Northern California

Chris is a VP Northern California at Inszone Insurance Services. His interest in commercial insurance was piqued in the summer of 2010 during an internship with Zurich North America where he came to appreciate the reward of helping businesses understand and defend themselves from risk. Given his background handling claims for Commercial Middle-Market, Global Corporate, and Large Construction accounts, he is able to provide unique insight to clients. Prior to his time in the commercial insurance field, his interest in human behavior culminated in the attainment of a Master’s Degree.

When Chris is not working, he enjoys spending time with his family and friends, losing golf balls every way imaginable, trying new wines, and hiking.

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