What Insurance Do Retail Businesses Need?

May 5, 2025

Customers, employees, and suppliers are constantly going in and out of your retail business. Is your retail business protected from accidents, mishaps, and lawsuits?

Without enough business liability insurance and other commercial insurance coverages, you leave your retail business exposed to possible lawsuits and repair costs that will come out of your own pocket.

What is retail insurance?

Retail insurance protects store owners against risks that are associated with selling, distributing, and producing goods. Did you know that your retail policy can be customized to shopping in-store and shopping online?

Here are the top 5 retail insurance coverages

Commercial property insurance

Commercial property insurance protects the building and also provides coverage for your retail inventory and stock, equipment, furniture, computers, and other electronics if damaged or destroyed by fire, severe weather such as hail and wind, vandalism, or theft.

How does commercial property insurance cover theft? Theft of stock is generally covered under the coverage for stock section in a commercial property insurance policy, protecting your retail business from financial loss due to theft of inventory.

What’s not included:

Equipment wear-and-tear
An unexplained loss
Deliberate damage to your business
Cash/securities

Commercial general liability (CGL) insurance

Commercial general liability insurance protects your retail business against claims of third-party bodily injury or property damage occurring on your premises or as a result of your business operations. CGL covers incidents such as slips and falls.

Without CGL insurance, you will be responsible for paying all the costs related to third-party (customers, suppliers, members of the public injuries) or damage to their property.

If you were sued, CGL insurance would help cover the legal costs to defend the claim against your retail business in court, as well as costs to cover damages to compensate third parties whether you win or lose your case.

What does commercial general liability insurance help cover?

Injury to a third party who is not your employee
Damage to someone’s property
Damage to rented property
Medical bills if someone is injured
Legal costs and settlement costs of liability lawsuits filed against you
Liability lawsuits related to slander and libel

Product liability insurance

Product liability insurance is recommended for any retailer who sells, manufactures, or distributes a product, including food products. It provides protection against claims alleging third-party property damage or bodily injury caused by a product you sell, distribute, or make.

Product liability insurance covers:

Design defects: There’s something wrong with the product’s design.
Manufacturing defects: Something went wrong during manufacturing.
Marketing missteps: A mistake in marketing materials, such as improper labels.
Insufficient warnings: The product doesn’t include sufficient warning/information about potential harm.

Cyber liability insurance

Cyber liability insurance is an important business insurance coverage for retailers, given the popularity of credit, debit, and online payments. Cyber liability insurance will help protect your store financially in case of a cyber-attack.

Depending on the size of the data breach and the information that was taken, the customers who are affected can hold you liable and sue you for damages. That’s when cyber insurance can protect you financially.

Crime insurance

Customers and staff have the opportunity to steal from your retail business. Crime insurance helps protect you against certain types of losses that are not covered by a standard commercial property policy, such as: employee theft, credit, debit or automated teller, counterfeit money, or loss of money at your store.

Business insurance add-ons to consider:

Overland flood insurance

Overland flood insurance provides protection for loss or damage related to water entering a property from a sudden accumulation of water. This usually results from heavy rain, spring run-off, or overflow from lakes or rivers. If you don’t have this add-on, you may not be covered.

Sewer backup coverage

Sewer backup coverage helps protect your retail store against water damage from sewer backups. Note that sewer backup insurance does not cover every type of water damage insurance claim.

In Canada, most standard commercial property insurance policies do not automatically cover sewer backup and overland flooding.

Business interruption insurance

Business interruption insurance helps support your retail business when it can’t operate due to a covered loss. You’ll be responsible for bills such as repairs, rent, and payroll even if your business is forced to close temporarily.

Losses that can force your business to shut down:

Your business is damaged by fire or vandalism
A disruption in your supply change
Damage to a neighboring business prevents your business from operating

Business interruption insurance can help with expenses such as payroll, rent, utilities, property taxes and relocation of your business.

Business interruption insurance is usually purchased as an add-on, or endorsement, to a standard commercial property insurance policy instead of as a standalone policy.

Why retail insurance is important

It gives you peace of mind that your store is protected while you are busy running your business.

Retailer insurance for your retail business is important because it protects you financially if you have a lawsuit against your business. It also protects you should you have repairs that need to be done due to a covered loss, such as a fire, vandalism, or weather damage.