5 Key NY State Insurance Coverages A Retail Business Owner Should Have In Their Policy

There are three critical ingredients to owning and running a successful business – time, energy and financial backing. Each day brings its own set of challenges, but insurance should never be one of those. 

As a retail store owner, it’s imperative to have insurance to cover any possible loss you could incur. 

With the help of a knowledgeable and experienced insurance agent, business owners should ensure they have the right amount of insurance coverage for every aspect that could arise.

And, since business needs change, reviewing the coverage is a must every year. Without proper coverage, you could be on the hook for a considerable sum of money or even lose the store. Make sure to protect yourself and your business from any possible problem that could occur. 

What Insurance Coverages Should A Retail Business Have?

General Liability Coverage

This coverage protects against accidental injury to customers/clients on your property (not employees). A time will inevitably come when an accident occurs, even if you’re the most conscious person aware of problems. A personal injury lawsuit can cost you millions of dollars. 

For example, a customer slips on your wet floor and falls. Their injuries consist of both neck and head injuries. They bring a $1,500,000 lawsuit against you, but your policy’s NY general liability insurance coverage is $300,000. What happens then? 

This is why you should be covered immediately before anything detrimental could occur

Business Property Coverage

When it comes to business personal property coverage, it is protection for your inventory, equipment, furniture, tools, fixtures, etc. Anything you own to run your business is protected with this coverage. You want the replacement cost of the property, not its current market value.  

Stores with fluctuating inventory can choose the yearly inventory’s high value. Stores with seasonal inventory can stick with the Peak Season Endorsement to attain more coverage during those peak seasons and keep the basic inventory coverage during the rest of the year.

Building Coverage

When you own the building your business is in, you should have a Replacement Cost Policy, which is a co-insurance clause. With it, you must insure your building for a certain percentage of the building’s actual replacement cost or be subjected to a penalty with reimbursement. 

For instance, the true replacement cost for your building is $1,000,000, and it’s only insured for $650,000 with a 90 percent co-insurance clause. Your building suffers fire damage, leaving behind $500,000 in damages. You have just 65% coverage when it should have been 90% coverage. This calculates to a co-insurance clause penalty of .72, which is, when multiplied by the $500,000 loss, leaves you with an insurance reimbursement of $360,000 and costs you $140,000 in your own money to repair your building.

With a proper replacement cost estimate, you won’t have to endure these penalties. 

Tenants Fire Legal Liability 

Business owners who lease their retail spaces would be wise to have the tenants fire legal liability coverage. With this coverage, you are protected in the event a fire originates from your store and causes damage to your space. This could run you hundreds of thousands of dollars. 

Be sure you have enough coverage to ensure the building is covered in case it’s a total loss. How do you do this? Take the total square footage of the space by the average cost per square foot to get the rebuild amount. Add in a cost for demolition and debris removal to get the best coverage amount.

Business Interruption 

The coverage is designed to recoup the lost income that occurs when your store is closed due to a covered policy incident like a fire, ice and snow damage, etc. It gives you income that you would have typically gotten if your business was still in operation up to the number of months coverage you choose. 

Some policies do not have this coverage or have just three months’ worth of protection. However, nearly all carriers do have the option of 12-month coverage. Go with the 12-month coverage option, which helps you in case there is a total loss, and you need to either move to a new building or have the building you own rebuilt. 

Insurance Is Financial Protection For You and Your Business

Running a company is hard, tedious work, but it can be gratifying. Make sure you can keep at it with the right amount of NY business insurance coverage in case the unforeseen occurs. Work with your insurance agent to ensure that your retail store has the best coverage possible in case something does happen.

Without the right coverage, it could create a financial fiasco that could result in the business closing for good. 

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