A few different risks small retail businesses can face

retail risks
3 minute read  

Opening a small retail store takes a lot of work and opens you up to many risks, which is why, as a small business owner, you need to be prepared. Whether you own a bakery, clothing store, cafe, or gift shop, the risk of theft, property damage, or potential lawsuits can be present. That’s why it’s important to understand the potential risks your business can face and consider retail business insurance which can help mitigate potential losses in the event of an unforeseen incident.

What can retail insurance help cover my business against?

1. Theft

Owning and operating a small retail business comes with the risk of theft because of foot traffic entering your business. Your products sitting on display can be targets for thieves especially if they’re left unattended or positioned away from typical employee sightlines. Replacing stolen stock can be a costly headache for business owners. According to CTV News Vancouver, retail theft is on the rise and has increased by a staggering 300 per cent since the start of 2020. Arming your business with security cameras and extra staff can help, but cannot entirely eliminate the risk. In the event of a theft, retail insurance may help cover potential losses.

2. Damaged inventory

It’s not just the risk of theft that retail business owners need to be prepared for. Your products and equipment are also at risk of damage. Accidents can happen even is your customers mean well. For example, items on display can be broken and clothing can get torn while being tried on. Replacing damaged inventory can be expensive and impact your small business’ growth.

Business owners may also want to prepare for adverse weather that can cause damage to inventory, whether it’s stored in a warehouse or a retail store. Damaged inventory can lead to a number of problems, from being unable to fulfill orders to financially draining your business accounts. The right retail insurance may help mitigate these risks and help your business continue to operate.

3. Property damage

On top of inventory damage, business owners need to be prepared for the risk of property damage. As a retail business, you are at risk of damage occurring inside and outside the store. A few things that could potentially be damaged include equipment, furniture, signage, fencing, and landscaping. Your business’ property could be at risk because of numerous events including, adverse weather, vandalism, water leaks, and fire. Experiencing damage to your retail business’ property could bring business operations to a halt very quickly. It could also lead to replacement costs, recovery costs, and repair costs. Having commercial property insurance may help your business cover the costs associated with a retail store claim.

4. Damaged company vehicles

Whether your business uses company vehicles to transport products, pick up supplies, or visit clients, you run the risk of your company vehicle being damaged. Using a company vehicle puts your business and the driver at risk of accidents, breakdowns, and even third-party property damage. Commercial auto insurance may help mitigate costs associated with the damage. As a small business owner, you may think that your personal insurance policy will cover damage to your vehicle if it’s used for business purposes. However, this can be inaccurate. Personal insurance typically doesn’t cover any damage done to company vehicles.

5. Forced closure

When you’ve worked to bring your business to life, forced closure is a possible risk and one that can be a reality for many small businesses. Owning a retail business means you have overhead expenses you need to cover and experiencing an interruption to your business can result in an inability to pay those expenses.  If expenses continuously go unpaid it could lead to the inability to keep your business running.

Many interruptions are entirely out of your control, regardless of how much you plan. These can include plumbing incidents, a fire next door or even a natural disaster. Having the right retail insurance that includes business interruption coverage may help protect your business if an unforeseen event does occur.

How can retail insurance help my small business?

Owning a small retail business comes with risks that you, as the business owner, need to be prepared for. If you aren’t, the consequences can be devastating to your business. Having a good retail insurance policy can help mitigate these risks.

For example, having retail insurance can help cover the costs associated with property damage that may cause interruptions to the daily operations of your business. Insurance may also help with covering the costs of replacing stolen goods, supplies, or equipment. Having a good retail insurance policy can help safeguard the business you worked so hard to build, ensuring your business has the best chance to succeed.

Ensure your retail business is protected with TruShield

Want to learn more about retail insurance? Check out our retail insurance page to learn more about how it can help mitigate your risks and safeguard your business.


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.