The Risks and Insurance Needs Facing Grocery Stores
(Protecting your business has never been easier)
Grocery stores are a staple in residential communities all over America. Many provide goods and services that go beyond food products including such things as pharmacies and catering services.
Opening a grocery store requires a large initial investment, so you will want to be sure to protect your business assets with a sound commercial insurance package.
Supermarket & Grocery Store Industry Facts
- There are more than 42,000 grocery store businesses operating in the United States.
- These stores employ more than 2.5 million people.
- The supermarket industry generates about $587 billion in revenue each year.
Your Grocery Store Needs Sufficient Property Coverage
You have invested a lot of time and money in opening your grocery store. Be sure to protect your business assets with the right kinds of property insurance. Talk to your insurance agent about:
- Building insurance: This provides coverage for repairs to the structure of your building if it is damaged by a covered event such as wind, lightning, fire or vandalism.
- Property insurance: This provides coverage for the products and inventory kept inside your store if they are lost or damaged by a covered event. Covered items include such things as your inventory of food and products, shopping carts, shelving, computer systems, cash registers, conveyer belts and display units.
- Boiler and machinery insurance: This is specialized coverage for the machinery kept and used in your grocery store. This includes everything from the heating and cooling units to the meat slicer at the deli counter to the freezers and refrigerators that keep your food fresh. In the event of a machinery breakdown, this insurance provides coverage for repairs or replacements and covers the cost to rent machinery while your owned machine is being repaired.
- Spoilage insurance: This is often included under the boiler and machinery insurance coverage. It provides compensation if perishable items are spoiled due to a failure of your cooling systems.
Protect Your Supermarket With the Right Liability Insurance
Every business runs the risk of a liability lawsuit, and grocery stores are no exception. Liability insurance protects your business assets by covering your legal defense fees, court costs, financial damages and other expenses related to the lawsuit. It is therefore important that you not only have this insurance coverage, but that you also have the right kinds of liability coverage. Be sure to talk to your independent insurance agent about:
- Premises liability insurance: This provides coverage if a third-party should suffer property damage or an injury while on your business premises. This is especially important in a supermarket, as dropped foods, particularly in the produce section, can produce slippery floors and hazardous conditions.
- Product liability insurance: This covers you against potential lawsuits if a product you sell in your store causes customers to be sickened or suffer injuries. This is something that might happen if bacteria such as E-coli cause foodborne illness to several of your customers. Because so many people can be affected, this type of lawsuit can become unmanageably expensive without the proper insurance in place.
- Advertising and personal injury liability insurance: If a competitor can claim copyright or trademark infringement in one of your weekly ads or if someone feels that they have been libeled or slandered by representatives of your grocery store, they may sue you for damages. This insurance provides coverage.
- Auto liability insurance: If your grocery store provides catering or delivery services, you likely have a company-owned vehicle or fleet of vehicles. In this case, you would need to cover them with commercial auto insurance. If employees sometimes use their personally owned vehicles to do work-related jobs or make deliveries for your store, you can be held liable if they are involved in an accident while driving on these errands. In this case, you would need hired or non-owned auto insurance in order to be covered.
- Liquor liability insurance: If your grocery store sells alcoholic beverages, there is a chance that your store could be held liable for damages or injuries caused by an intoxicated person who acquired the alcohol in your store, especially if the person is underage. Liquor liability insurance provides your business with coverage in this event.
- Druggist liability insurance: If your grocery store provides pharmacy services, you will need to have the proper pharmacy insurance, including druggist insurance. Pharmacy insurance is a form a professional liability insurance designed specifically for pharmacists.
- Cyber liability insurance: This covers the financial burden that may be imposed on your grocery store in the event that criminals target your computer system and access customer information, including credit card numbers.
- Umbrella insurance: Because insurance companies impose caps on the amount of liability insurance they are willing to provide, umbrella insurance may be necessary if you feel that you need extra liability coverage in order to adequately protect your grocery store’s finances. Umbrella insurance takes over where you other liability coverage leaves off.
What Other Grocery Store Insurance Coverage Should You Consider?
In addition to the supermarket insurance types mentioned above, there are other coverage options that may be a good fit for your grocery store. Be sure to talk to your independent insurance agent about:
- Business income insurance: This coverage provides your supermarket with a continuation of income if you must close for an extended period due to damage caused by a covered event. This continued income will enable your grocery store to continue to pay employee salaries and bills until normal business operations resume.
- Workers’ compensation insurance: This is particularly important in a grocery store setting where you have several employees who are in situations where injuries are commonplace such as in the deli, the bakery and the stock room. This insurance provides coverage for medical treatment, lost wages and other expenses related to employee injuries that occur on the job.
- Flood and earthquake insurance: Commercial insurance policies specifically exclude coverage for damage caused by floods and earthquakes. If your grocery store is at risk for either of these disasters, your independent insurance agent can help you supplement your portfolio with the appropriate coverage.
- Employment practices liability insurance: This protects your business if a disgruntled employee sues your grocery store for engaging in an illegal business practice such as wrongful termination, discrimination or harassment.
- Employee dishonesty insurance: This protects your supermarket from financial losses if an employee steals from your business or engages in other illegal behaviors while on the job.