Article April 5, 2023

Retailers: What insurance do they need?

The retail sector covers a broad range of products and hosts a variety of online and in-person operating models. Each business has its own unique risk profile, but there are key covers – some mandatory – that every retailer should consider.

Supply chains, products and physical stores present many common exposures for retailers. But this leaves some gaps for modern retailers especially with an online presence and reliance on technology. Business interruption, product recalls and security breaches are all very real events that can quickly rack up financial costs for retailers, so it’s important to know what cover is available.


  1. Property & casualty

Employers’ liability is a mandatory insurance for any retailer with employees, while public liability offers bodily injury and property damage cover against third-party claims from clients and/or members of the public. Public liability cover is just as important for online retailers managing warehouses and supply depots as it is for those with a portfolio of shops.

Similarly, property and contents cover is an essential consideration for in-store retailers as well as online sellers that need to safeguard their storage centres and stock. With a heavy reliance on their supply chains, retailers can suffer losses caused by problems of commercial partners too, at no fault of their own.

A loss could occur in many ways; a fire could ignite due to a third-party self-storage area; a robbery resulting in store damage and stolen goods; even a staff member could severely injure themselves whilst working. And if a loss means retailers cannot sell their products or access their premises – shops, warehouses, administration centres – business interruption cover will minimise the ongoing impact on operations and provide financial support as issues are rectified.


  1. Cyber

Every business has an increasing cyber exposure in today’s digital world and retailers are no exception.

Sales, marketing, business administration and supply chain management functions all rely on technology. Retailers process in-store purchases, manage online stores and orders, handle large amounts of sensitive customer data and have reputations to protect.

For example, if a security patch was not implemented,  it could leave a crucial gap for a cybercriminal to use to hack into the online website database which could lead to a system outage resulting in business downtime. During this time, the hacker could access customer card details and other sensitive information causing a customer’s accounts to be drained quickly leading to financial losses and a lack of consumer trust in the brand.

Cyber insurance covers financial losses caused by business interruption, system downtime and data breaches. CFC’s policy also provides key reputational protection, which is especially important when the competition for customers is so fierce in this fast-moving sector. 


  1. Product recall

Products are not always perfect and where concerns arise over safety or quality they need to be removed from circulation. Recall, rectification and business interruption costs caused by product recalls, carry hefty financial implications and can hit ongoing operations, dent future sales and damage hard-earned reputations.

Perhaps a child’s toy is found to be a choking hazard; a battery in an electronic device is identified as a fire rise; or a food product has been tampered with and might harm consumers. In such situations, retailers have to get the product off their shelves and back from consumers as quickly as possible.  

Product recall insurance provides cover for the costs of responding to a recall event as well as the loss of future sales, while the product remains unavailable for sale – generally for up to 12 months. Investigation, storage and product disposal costs are also covered, while the insurance provides crisis management and brand protection support.


  1. Terrorism

International geo-political tensions are on the rise and acts of terrorism are an unwanted but real threat to people, communities and businesses throughout the UK.

For retailers - especially in high traffic locations, terrorist attacks threaten their staff, shops and storage premises access. Some cover may be available as part of a wider property policy, but standalone insurance offers more clearly defined and certain protection for retailers.

Even if a retailer’s premises are unaffected directly, terrorist attacks in neighbouring facilities can lead to a shutdown and losses from these situations are also covered.

Terrorism and sabotage insurance protects retailers against political, religious and ideological acts, and includes cover for damage to premises, restriction of access to property and utilities, and loss of income across single or multiple sites.


Find out more…

Retailers face an evolving mixture of exposures and need quick, assured and effective responses when things go wrong. CFC’s range of covers can be tailored to give retailers the insurance they need to focus on growing their business and getting back on track quickly if disaster strikes.

Get in touch to find out more about how CFC supports retailers.