Why is General Liability Insurance So Important for Retail Businesses?
Posted on October 15, 2024 | by | Posted in Insurance
Retail is a tough industry. It’s competitive and involves lots of work with the public, which most of us can agree is not always easy. If you own a retail business, you’ll have members of the public visiting your business throughout the day, which means you’ll need to take measures to keep them and their property safe. However, even if you’re careful, incidents can happen. Unfortunately, this can be costly for any business, so how do you ensure you are covered?
General liability insurance can cover many common risks associated with retail businesses. From trips and falls to injuries caused by one of your products, it can help cover many of the legal claims that retailers have to deal with. Read on to find out more about general liability insurance, what it covers, and why it’s so essential if you own a retail business.
What Does General Liability Insurance Cover?
General liability insurance covers businesses against claims from third parties. Within a retail business, this would mostly cover claims made by customers due to accidents on your property. If a customer, delivery person, or other visitor to your property is injured, they may be looking to recoup medical expenses, legal fees, lost wages, and more. These costs soon add up and can be a big financial strain on your business, which is why it’s so important to have adequate insurance coverage.
Retail Businesses: The Common Risks They Face
There are many common risks specific to retail businesses that can be covered by general liability insurance:
- Customer injuries – from trips and falls to injuries caused by faulty electrics; customer injuries can happen in any retail environment. Make sure you’re covered in case one happens on your property.
- Customer property damage – if you repair an item for a customer that is then damaged, or damage occurs to customer property due to negligence, general liability insurance can help you cover the cost to repair or replace the item
- Advertising injuries – if your business advertises in any medium, there is a risk you could be subject to a lawsuit for defamation, libel, or copyright infringement. General liability insurance could help with legal costs in this case.
- Damage from a product – if a product you sell injures a customer or causes any other type of damage, general liability insurance can cover things from medical bills to legal fees
While the incidents above may be rare, they can be extremely costly to retail businesses of any size, which is why general liability insurance is needed.
Why Retail Businesses Need General Liability Insurance
The main reason businesses take out general liability insurance is because it covers expenses if there’s any kind of incident that might lead to a lawsuit. This can include:
- Medical expenses
- Legal and court fees
- Compensation for property damage including repairs or replacements
- Legal fees to defend against libel, slander, or defamation lawsuits
All the above can be extremely costly, especially to smaller businesses or sole traders, but with general liability insurance, you get peace of mind that you’re covered should the worst happen.
Peace of Mind for Your Customer
General liability insurance is not just reassuring for you, it’s also something that’ll no doubt be important to your customer. Taking out proper insurance shows that you’re a credible business that cares for its customers and will do the right thing if something goes wrong.
Insurance cover is especially important if you’re looking to secure long-term or costly leases or contracts. Decision makers want to know that the company they’re dealing with is credible and has thought of all eventualities, and having general liability insurance can help give them this reassurance.
What to Look for When Choosing General Liability Insurance
Choosing the right insurance policy is important. If you need to make a claim, you want to be sure you have the correct coverage and the right amount.
When choosing a coverage limit, think about your business size, the amount of interaction you have with customers, and the level of risk involved in your business. For example, if you’re a retailer that is open 24/7, there’s a higher risk involved with customers visiting your premises at all hours. If you sell a product that can potentially malfunction or have manufacturing errors, you need to be covered in case this happens.
If you’re unsure about the type and amount of cover you need, it’s worth speaking to insurers who specialise in general liability insurance. Matrix Insurance specialises in business insurance solutions, so will be able to discuss the level of coverage that’s right for you, as well as give you a competitive quote.
As with most insurance policies, the higher the coverage you choose, the higher your premiums will be. However, there are a lot of other factors that insurers will take into account when calculating premium costs. This includes things like your business location, number of employees, and your revenue.
Other Business Insurance Policies
General liability insurance doesn’t cover you for all eventualities, so you may wish to integrate your policy with other types of insurance.
A business owner’s policy, or BOP, might be suitable if you run a smaller retail operation. It brings together general liability insurance and commercial property insurance to also cover things like fire, floods, and anything that could cause business interruption. Speak to your insurance agent to find out if this is right for your business.
It’s worth noting that general liability insurance won’t cover injuries to employees. You should look into workers’ compensation insurance to ensure that is covered. Cyber liability insurance is also becoming increasingly important in the world of e-commerce. It can cover your business in the event of a cyber-attack, including the expenses that come from data leaks and business interruption.
No business owner wants to think of the worst happening, but if it does, it’s good to know you’re covered. That’s why general liability insurance is so important. It covers the things that retail businesses can’t always prevent, such as injuries and damage to property. Whether you own a small shop or have a large retail operation, Matrix Insurance can help find you a general liability insurance policy that’ll give you the right level of coverage. Simply call our agents on (08) 6555 7742 or click ‘request a quote’ to find out more.
