Do you need retail business insurance?

3 minute read  

Running a retail business takes more than financial management skills. It requires a mix of passion and hard work — and usually a lot of long hours. It can be incredibly rewarding, but it also comes with risk, whether you manage a physical store, run an online business, or work out of your home.

To stay competitive, you need to understand the needs of your customers, market your business, manage store inventory, and turn a profit — all while continually striving to provide excellent customer service (sometimes over multiple channels).

But no matter what type of business you run — a clothing boutique, a bakery, a gift shop, a pet supply store, or a specialty food supermarket — you deal with customers, which means you can open the door to liabilities and exposures.

Customers (or anyone else who comes into contact with your business) could sue you if they sustain an injury on your property. You could even be held responsible for a faulty product or a data breach, regardless of whether you did anything deliberately wrong.

As a retailer, you have to deal with everything from weather-related property damage to ransomware attacks to theft. In fact, the Retail Council of Canada reports that shoplifting increased across all retail categories in 2023 including food, apparel, and footwear merchandise, thanks to inflation and a growing market for stolen goods.

If these types of concerns are keeping you up at night, that’s where retail insurance can help.

What type of insurance do retailers need?

A comprehensive retail small business insurance policy may include a number of coverages that can be tailored to a retailer’s unique needs and assist with a range of risks. These coverages include:


Commercial general liability (CGL) insurance: Third-party liability is one of the most common liability risks for retailers. For example, if a customer slips on a wet floor in your flower shop, you could be held liable for bodily injury. CGL insurance can help protect you and your business from a loss if you’re found legally liable for bodily injuries or property damage to a third party caused by the products you sell.


Product liability insurance: Retailers are also at risk of product liability exposures, whether you create your own products or purchase products from a distributor or wholesaler. Even if you purchased a product for resale, you could still be held liable if that product is responsible for causing bodily injury or property damage to customers. If, for example, a chicken salad you sell in your specialty food shop causes a salmonella outbreak, you could face a lawsuit. CGL insurance can help with this.


Commercial property insurance: If your business has a storefront, whether you rent, lease, or own, it’s at risk of property damage caused by fires, floods, and other natural disasters. It’s also an attractive target for theft and even vandalism. The right policy can help to protect against these types of losses, and even pay to replace equipment, inventory, and furnishings when an insured loss occurs.


Cyber insurance: When it comes to cybercrime, retail is the third-most attacked industry in Canada, according to the 2023 IBM Security X-Force Threat Index. The report states that the retail sector is “an attractive target for cyber attackers due to its large amounts of sensitive information and financial transactions, its reliance on a complex supply chain network, and the potential for significant reputational damage.”

As a retailer, you may store sensitive data online, such as customers’ credit card numbers. Cyber insurance can help protect you from expenses that come with data breaches, including remedial actions, network repairs, and legal claims.


Business interruption insurance: If you’re forced to temporarily shut down your business — say, after a fire damages your storefront and your inventory, or after a cyberattack takes down your network — you still have to pay the bills. Business interruption insurance can help you cover lost business income and ongoing business expenses while your business is temporarily closed.


Commercial auto insurance: If you use a company vehicle to pick up supplies or deliver products, commercial auto insurance can help protect your vehicle, your employed drivers, and your passengers.

Who needs retail insurance?

No matter how small your business is — even if you’re a one-person shop — it’s still at risk for various forms of liability. Retail insurance can provide a safety net, whether you run your business out of a physical or digital storefront (or both).

There may also be times when you’re required to show proof of insurance. For example, if you’re renting a storefront, your lease may require liability insurance. Or a wholesaler or distributor may need proof of insurance to conduct business.

Protect yourself and your business

The right retail insurance coverage can help to protect your business from many of the costs associated with legal repercussions of liability-related issues. So, you can keep doing what you love — and have fewer sleepless nights over the things you can’t control. Get a quote today!


This blog is provided for information only and is not a substitute for professional advice. We make no representations or warranties regarding the accuracy or completeness of the information and will not be responsible for any loss arising out of reliance on the information.