As a retail business owner, you’re all too aware of what factors can disrupt your business and your bottom line. Customers, employees, and vendors could file a claim against your business if they get hurt or their property is damaged on your premises.
Your main source of revenue—your customers—may actually be one of your biggest risk factors. Therefore, you need to be aware of the four most common retail insurance hazards so you can take the steps necessary to prevent them.
Hazard #1 – Slip and Fall Injuries
Bodily injury from slips and falls can happen to anyone interacting with your business, including customers, employees, and third-party vendors and suppliers.
If your business is found liable for a bodily injury claim, you could end up having to pay:
- Lost Wages
- Medical Bills
- Legal Fees
- Pain & Suffering
Even if you don’t believe you’re responsible for a bodily injury claim that a third party suffered at your business, they could still file, and win, a claim against you. Therefore, you must ensure a safe business environment.
Your potential liability isn’t limited to your store’s interior either. It’s just as important to maintain your building and grounds, such as walkways, staircases, and parking lots.
Take these precautions to prevent or reduce the chances of slip and fall accidents on your property:
- Keep interior and exterior walkways clear of debris, water, snow, ice, and other tripping hazards.
- Inspect parking lots and all walkways regularly.
- Keep handrails and walking surfaces in good condition.
- Install proper lighting, including emergency lighting.
- Establish safety inspection and monitoring procedures for your building and grounds.
Hazard #2 – Theft, Burglary & Shoplifting
Retailers in the U.S. lose $60 billion a year to theft, burglary, and shoplifting, according to Forbes. Needless to say, these types of crimes can impact your bottom line and create an unsafe working environment for customers and staff.
You may not be able to prevent every instance of theft, but you can reduce it by taking the following steps:
- Install outdoor lighting to deter nighttime theft.
- Install cameras and security systems.
- Use inventory control procedures to keep track of items going in and out of your store.
- Put expensive items behind sales counters. Lock them.
- Ensure staffing numbers are adequate to deter shoplifters.
- Utilize access control procedures to ensure keys, codes, and merchandise storage areas remain in trustworthy hands.
- Monitor exits, entrances, storage areas, sales counters, cash registers, and any place where sensitive items or information is kept with cameras.
In addition, you can also take steps to reduce the likelihood of your business falling victim to specific types of crime, such as burglary. Burglary is when thieves gain illegal access to your business, but ensuring that entrances and windows have proper security and locks can help deter would-be criminals. Alarm systems should also trigger whenever someone opens any entrance, such as doors, windows, loading docks, and roof hatches.
To deter robbery, which is the action of taking property unlawfully from a person or place by force or threat of force, contact your local police department to develop safety plans that you can share with your employees. You may also want to install a panic button that employees can use to quickly alert the police in the event of a robbery.
The following safe money-handling tips can also reduce the likelihood of a robbery:
- Employees should only open the cash register when they’re completing a transaction.
- Close the cash register drawer immediately after each transaction.
- Have a manager empty the cash in the cash register whenever it gets too full.
- Only count the money in the drawer in secure areas.
- Always lock the cash register and keep the key in a safe place.
- If employees have to make bank drops, instruct them to vary the time of these deposits and never send them alone.
- Disguise your money pouch for bank deposits as something else.
- Choose safe, brightly-lit routes to the bank.
- Train employees on what to do during a robbery, such as staying calm and obeying the robber’s demands.
- Utilize opening and closing procedures.
- Keep non-essential exterior doors locked at all times.
- Use a sign announcing that you have limited cash in your store.
Unfortunately, theft can be perpetrated by employees too. To minimize this risk, adhere to strict guidelines for moving assets, products, inventory, goods, or cash from the company. Placing cameras near areas where cash is stored can also help deter employees from stealing. Finally, use background checks to ensure that you’re hiring the most trustworthy employees.
Hazard #3 – Weather & Fire
Severe weather and fires can also pose hazards to your retail business. For example, there are 13,570 structure fires in stores and other mercantile properties yearly, according to the National Fire Prevention Association.
Fortunately, there are things you can do as a business owner to reduce or mitigate the possibility of having to file a retail insurance claim:
- Train personnel in emergency preparedness procedures.
- Conduct regular property inspections to identify potential hazards, such as electrical or water issues.
- Conduct scheduled maintenance for fire, lighting, security, safety, electrical, plumbing, and HVAC systems.
- Winterize your building and water pipes to ensure they don’t burst from freezing.
- Utilize emergency plans in the event of severe weather.
- Store inventory safely, preferably off the ground to reduce the risk of water damage.
In addition, you can take seasonal weather precautions, such as using these emergency “toolkits” from Ready.gov to help protect your business from disasters such as hurricanes, severe winds, flooding, and more.
Severe Weather Precautions
- Stay informed with local forecasts.
- Secure windows and doors.
- Move company vehicles to a garage and/or away from trees.
- Bring outside furniture indoors.
- Secure outside objects (grills, signs, umbrellas, etc.).
- Clean gutters and drains to ensure water flows away from your facility.
- Check your roof for loose or missing materials that might be vulnerable to strong winds.
- Locate and repair gaps or roof penetrations that can cause water damage.
- Conduct landscaping to prevent trees or limbs from damaging your business.
- Move boxes and equipment to an elevated area in case of flooding.
- Fully charge electronic devices like flashlights, laptops, and phones.
- Back up electronic files to a safe location.
- Check your exterior for penetrations that let in cold air, water, or ice.
- Winterize your heating system for extreme cold.
- Insulate pipes.
- Insulate gaps in windows, doors, attics, loading docks, and other spaces that could let in too much cold air with caulking, weather stripping, etc.
- Prepare for power outages.
- Stock adequate emergency supplies.
Tip #4 – Use Proper Ergonomics
The move toward digitized business practices—partly driven by the pandemic—has increased the reliance on technology for many retail businesses. As a result, your business may be exposed to more risk from cybercriminals than in the past as they seek to exploit vulnerabilities between data systems, platforms and services.
This trend will only continue as criminals know that many small retail businesses are easy targets. Consider these sobering statistics:
- Small business cyber breaches increased by 424% last year.
- 71% of cyberattacks target businesses with fewer than 100 employees.
- The average cost of a cyberattack on businesses with fewer than 250 employees is $25,600
- 3 out of 4 small businesses say they don’t have the personnel to address IT security.
One of the best ways to protect yourself against cybercrime is through Cyber Liability insurance. It can protect you in the following ways:
- Legal Fees
- State Requirements
- Data Monitoring for Impacted Customers, Businesses & Individuals
- Provide Credit Monitoring for Affected Individuals
- Costs Incurred from Stolen Data
- Repair of Computer Systems
- Notify Impacted Individuals
Do you have the right retail insurance coverage?
*Disclaimer: We offer content for informational purposes; Co-Op Co-operative Insurance Companies may not provide all the services or products listed here. Please contact your local agent to learn more about how we can help with your insurance needs.
Forbes. New Report Identifies US Retailers Lose $60 Billion a Year, Employee Theft Top Concern. https://www.forbes.com/sites/nicoleleinbachreyhle/2015/10/07/new-report-identifies-us-retailers-lose-60-billion-a-year-employee-theft-top-concern/?sh=1277c7a480eb
Fundera. 30 Surprising Small Business Cyber Security Statistics. https://www.fundera.com/resources/small-business-cyber-security-statistics
IFFT & Palmer. 3 Key Steps to Reduce Vulnerability to Theft and Reduce Business Insurance Claims. https://www.ifftpalmer.com/blog/3-key-steps-to-reduce-vulnerability-to-theft-and-reduce-business-insurance-claims.aspx
Insurance Hub. Tips for keeping your employees safe while they handle cash. https://insurancehub.com/tips-for-handling-cash/
National Fire Protection Association. Structure Fires in Stores and Other Mercantile Properties. https://www.nfpa.org/News-and-Research/Data-research-and-tools/Building-and-Life-Safety/Stores-and-other-mercantile-properties
NEXT. 5 Common Retail Business Insurance Claims and How to Avoid Them. https://www.nextinsurance.com/blog/common-retail-business-insurance-claims/
Nerd Wallet. Cybersecurity Insurance: What It Covers, Who Needs It. https://www.nerdwallet.com/article/small-business/cybersecurity-insurance
SWBC. Common Retail Insurance Claims and How to Avoid Them. https://blog.swbc.com/businesshub/common-retail-insurance-claims-and-how-to-avoid-them
TruShield Insurance. Common Lawsuits Your Retail Business Could Face. https://www.trushieldinsurance.ca/wp-content/uploads/2022/03/3800-001-White-Paper-Retail-v01.pdf