Grocery stores offer multiple conveniences to the public. Many provide goods and services beyond food products, including pharmacies and catering services. However, grocery stores are vulnerable to numerous risks on a daily basis, including shutdowns due to fire, vandalism, power outages, and more.
Opening a grocery store requires a large initial investment, so you want to be sure to protect your business assets with a sound business insurance package. An independent insurance agent can help you build an insurance policy that meets the coverage needs of your particular grocery store. But first, use our guide to grocery store insurance to learn what types of coverage are necessary and more.
Key Takeaways - Grocery Store Insurance
- Grocery store insurance is a type of business insurance policy that contains several types of coverage, including liability, commercial property, workers' compensation, business interruption, and more.
- Grocery store owners pay an average of $516 per year, or approximately $43 per month, for general liability insurance alone, and the cost of a comprehensive policy can be significantly higher.
- Without grocery store insurance, your business could have to pay out of pocket to cover large expenses, such as those resulting from lawsuits, business interruptions, or food spoilage.
- Workers' compensation insurance is required by law in many states for grocery stores that have employees.
- Working with an independent insurance agent is highly recommended, as they can compare grocery store insurance policies and quotes from multiple local carriers and tailor coverage to your unique business.
What Is Grocery Store Insurance?
Grocery store insurance is a special type of business insurance policy designed to meet the needs of grocery stores and their owners. These policies typically include several types of coverage, including liability, commercial property, spoilage, workers' comp, and more. Grocery store insurance coverage can help protect against various risks and potential huge costs after disasters such as fire, theft, vandalism, power outages, and more.
What Does Grocery Store Insurance Cover?
Supermarket insurance typically includes several types of coverage, such as liability protection and coverage for commercial property damage. You've invested a lot of time and money in opening your grocery store, so consider adding all of the following types of coverage to your complete food retailer insurance policy.
General liability insurance
Commercial general liability insurance covers your legal defense, court expenses, settlement damages, and other expenses related to a third-party lawsuit stemming from claims of personal property damage or bodily injury. Common claims in grocery stores result from customer slip-and-fall injuries.
Commercial property insurance
Commercial property insurance covers the products and inventory kept inside your store if they are lost or damaged by a covered event. Covered items include things like your inventory of food and products, shopping carts, shelving, computer systems, cash registers, conveyor belts, and display units.
Business interruption insurance
Business interruption insurance provides your supermarket with a continuation of income and pays ongoing expenses, such as employee wages, if you must close for an extended period due to a covered event, such as a fire.
Workers' compensation insurance
Workers’ comp provides coverage for medical treatment, lost wages, and other expenses related to employee injuries and illnesses that occur on the job or as a result of work duties.
Product liability insurance
Product liability insurance covers the cost of lawsuits and other expenses if a product you sell causes customers to get ill or suffer injuries. This might happen if bacteria such as E. coli in your products cause foodborne illness to several of your customers.
Commercial vehicle insurance
Commercial auto insurance can help cover the costs of lawsuits arising from accidents and other mishaps involving company vehicles used by your grocery store for deliveries, catering services, etc. If employees use their personally owned vehicles to do work-related jobs or make deliveries, you can be held liable if they are involved in an accident, in which case your store would need hired or non-owned auto insurance for these incidents to be covered.
Liquor liability insurance
Liquor liability insurance can protect you against lawsuit expenses if your grocery store sells alcoholic beverages. There's a chance your store could be held liable for damage or injuries caused by an intoxicated person who acquired the alcohol in your store, especially if the person is underage.
Druggist liability insurance
Druggist liability insurance is a form of professional liability insurance designed specifically for pharmacists and is required for grocery stores that contain pharmacies. It can cover the costs of lawsuits arising from mistakes when filling prescriptions and more.
Cyber liability insurance
Cyber liability insurance covers lawsuits and other expenses if cyber criminals target your computer system and access private or sensitive customer information, including credit card numbers, and expose, distribute, or sell the data.
Commercial umbrella insurance
Commercial umbrella insurance can increase your existing liability coverage beyond what's included in your standard policies. Business umbrella coverage increases your existing liability coverage limits by increments of $1 million to cover particularly expensive lawsuits.
Boiler and machinery insurance
Boiler and machinery insurance is specialized coverage for the machinery kept and used in your grocery store, including heating and cooling units, meat slicers, freezers, and refrigerators. In the event of a machinery breakdown, it pays for repairs or replacements and covers the cost of renting machinery while yours is being repaired.
Spoilage insurance
Spoilage insurance is often included under boiler and machinery coverage and provides compensation if perishable items are spoiled due to a failure of your cooling systems, such as from a power outage.
An independent insurance agent can help ensure you get all the right coverage in your grocery insurance policy.
Other Grocery Store Insurance Coverage Options to Consider
Additional coverage options may also be a good fit for your grocery store. Keep in mind that grocery store insurance programs need a variety of coverages to be complete. Be sure to talk to your independent insurance agent about:
- Flood insurance: Commercial insurance policies specifically exclude coverage for damage caused by natural flooding, so if you're located in a flood zone, consider adding a separate flood policy.
- Employment practices liability insurance: This protects your business if a disgruntled employee sues it for claims of illegal business practices such as wrongful termination, discrimination, or harassment.
- Crime insurance: This protects your supermarket against financial losses if an employee or a criminal steals products or engages in other criminal activity.
Your independent insurance agent can recommend the exact types of additional coverage your grocery store needs the most.
Is Grocery Store Insurance Required?
No, grocery store insurance isn't typically legally required. However, having coverage is still strongly recommended. Without this protection, your business could face potentially devastating financial losses, including bankruptcy. Just one unexpected lawsuit could set your business back thousands of dollars, or even more.
Additionally, workers' compensation insurance is often required by law in many states for businesses that have employees, with a few exceptions. Be sure to review your state's workers' comp regulations. Overall, having a complete grocery store insurance policy can be well worth the cost of your premiums.
How Much Does Grocery Store Insurance Cost?
Grocery store owners pay an average of $516 per year, or approximately $43 per month, for general liability insurance alone. A complete policy with several types of coverage will cost much more than this. Further, the larger your grocery store is, the more likely it is that the coverage will cost more. Here are some average costs for a few of the most common types of coverage needed by supermarkets:
| Insurance Type | Average Annual Cost | Average Monthly Cost |
|---|---|---|
| General liability insurance | $516 | $43 |
| Workers’ compensation insurance | $2,100 | $175 |
| Commercial umbrella insurance | $708 | $59 |
| Commercial auto insurance | $2,052 | $171 |
| Cyber liability insurance | $684 | $57 |
You can potentially lower your grocery insurance premiums by asking about common discounts offered by many insurance companies, such as bundling, loyalty, or remaining claim-free. An independent insurance agent can help you find affordable grocery store insurance near you.
Factors that affect grocery store insurance costs
The cost of grocery store insurance depends on a number of factors. Just a few of the most common factors that impact the cost of your business insurance policy include:
- Your store's location
- Your store's size and annual revenue
- The number of employees it has
- The types and amounts of coverage it needs
- Your store's specific operations and risks
- Your store's claims history
An independent insurance agent can help compare policies from many local business insurance carriers and help you find the most affordable supermarket insurance coverage.
An Independent Insurance Agent Can Help You Find the Right Grocery Store Insurance
When shopping for supermarket insurance to protect your business interests, it's ideal to work with an experienced independent insurance agent. Unlike captive agents who are limited to a single insurance company, independent insurance agents are free to shop and compare quotes and policy options from multiple carriers in your area to find the best deal. They can help you understand your coverage options and recommend the right kinds of coverage for your store. Ultimately, they'll get you matched to the grocery store insurance policy that offers the best blend of coverage and cost.
FAQs About Grocery Store Insurance
What types of insurance do grocery stores need?
Grocery stores need several types of insurance, including coverage for liability, commercial property, employees, company vehicles, food spoilage, and more.
How much does grocery store insurance cost per month?
Grocery stores pay an average of $43 per month for general liability insurance alone. The cost of a full policy containing several types of coverage can cost hundreds of dollars per month or even more.
Does grocery store insurance cover food spoilage?
Yes, grocery store insurance covers food spoilage that occurs due to power outages and other covered perils.
Is product liability required for grocery stores?
While not technically required, having product liability insurance is generally a wise decision for grocery stores.
Can small grocery stores bundle insurance policies?
Yes, small grocery stores can bundle their coverage together in a businessowners insurance policy, or BOP.
Sources
https://www.insureon.com/retail-business-insurance/grocery-stores/cost
