Shop Insurance

Shop Insurance is a specialised insurance policy designed to protect the contents and property of small to medium-sized shops. This type of insurance covers various risks, such as burglary, natural calamities, accidental fires, and other unforeseen events, similar to fire insurance. Shop Insurance helps safeguard the policyholder’s business interests and property from potential risks and mishaps.

What is Shop Insurance?

It is a financial safety net for shop owners, offering coverage for losses due to theft, man-made disasters, and natural calamities. It is a legal agreement between the insurer and the policyholder, where the insurer reimburses losses or damages specified in the policy.

Why is Shop Insurance Required?

It is essential for small to medium-sized shopkeepers who operate on tight profit margins. Unexpected events like burglary, fire, or natural disasters can significantly impact their business and livelihood. A shop insurance policy helps protect against these risks, ensuring the shopkeeper’s property and business interests are secure.

Who Needs a Shopkeeper Insurance Policy?

• Independent Shopkeepers: Anyone whose primary income source is a shop should insure it to protect their livelihood from unforeseen events.
• Family Business Owners: Family-owned shops selling items like clothes, footwear, or furniture should have insurance to safeguard their business.
• Shops in Prime Areas: Shops in high-traffic locations are more prone to risks and should be insured.
• High-Risk Businesses: Shops with higher risk levels, like fuel stations or electronics stores, should have coverage.
• Multiple Shop Owners: Owners of multiple shops should insure each one to mitigate the increased risk of emergencies.

Key Features & Benefits of Shop Insurance

• Property Protection: Covers losses due to fire, earthquakes, explosions, natural disasters, riots, burglary, and equipment breakdown.
• Liability Coverage: Some policies cover third-party legal liabilities, injuries, and property damage. Worker compensation as per the Workmen’s Compensation Act, 1923, and Fatal Accidents Act, 1855, is included in some plans.
• Money Protection: Covers loss of money during transit between the shop and the bank due to robbery or theft.
• Cost-Effective Plans: They provide comprehensive coverage at an affordable premium.

Shop Insurance Plans in India

• Fire Cover: Protects against damage from fire incidents.
• Aircraft Damage Cover: Covers losses from aircraft accidents.
• Implosion/Lightning Explosion Cover: Protects against implosions and lightning.
• Malicious Acts, Riot, and Strike Cover: Covers damage from riots and malicious acts.
• Natural Disaster Cover: Covers losses from cyclones, storms, floods, and more.
• Machinery Breakdown Cover: Protects against equipment failures.
• Burglary Cover: Covers theft and burglary losses.
• Infidelity Cover: Protects against employee dishonesty.
• Personal Accident Cover: Covers injuries to the shop owner or staff.

Best Add-On Covers For by Shop Insurance

• Earthquake Cover: Protects against earthquake damage.
• Escalation Cover: Adjusts coverage for inflation or increased costs.
• Terrorism Cover: Covers damage from terrorist acts.

Types of Stores Covered Under Shop Insurance

• Electronics Shops: Includes mobile phone and electronics retailers.
• Lifestyle and Fitness Shops: Includes malls, spas, showrooms, and gyms.
• Grocery and General Stores: Covers general stores and supermarkets.
• Manufacturing and Processing Units: Includes factories and mills.
• Food and Eatables Shops: Covers cafes, restaurants, and food trucks.
• Home Repair Services: Includes garages, carpentry, and plumbing shops.
• Healthcare Services: Includes pharmacies and diagnostic centers.
• Others: Any other shops not mentioned above.

What is Not Covered in a Shop Insurance Policy?

• War or Warlike Operations: Losses due to war are excluded.
• Loss of Earnings: Coverage does not extend to lost income.
• Contamination or Pollution: Excludes damage from pollution or radioactivity.
• Burglary by Insiders: Theft by employees or household members is not covered.
• Equipment Wear and Tear: Excludes damage from regular use.
• Pre-existing Faults: Damage from known defects at the start of the policy is not covered.

How to Calculate Ideal Shop Insurance Coverage

Calculating the ideal shop insurance coverage is straightforward. By considering a few key factors, you can determine the right coverage for your shop insurance policy. Here’s what to keep in mind:

• Fire & Allied Perils, Burglary, and Housebreaking Coverage: Assess the value of the stock, items in the shop, and fixtures and fittings. Determine the coverage amount needed to protect these assets (excluding land cost).
• Money Insurance: Estimate the average amount of money handled at the shop, both on-site and during transit to and from the bank.
• Pedal Cycle Cover: Consider the details of any pedal cycles used in your business, including make, model, manufacturer, year, frame number, and value.
• Signage Cover: Calculate the total value of signs installed in and around your shop to ensure they are protected.
• Fixed Plate Glass Cover: Enter the total value of fixed plate glass in your shop premises to determine the necessary coverage.
• Business Interruption Cover: Evaluate your gross income, accountant’s charges, and the indemnity period needed to protect against lost income due to interruptions. Include your Sales Tax number and PAN number.
• Additional Covers: Consider adding extra protection, such as personal accident cover, fidelity guarantee cover, public liability cover, electronic equipment cover, workmen’s compensation cover, and breakdown cover for electrical appliances.

By evaluating these factors, you can tailor your shop insurance policy to fit your specific needs and ensure comprehensive protection for your business.

How to File a Claim for a Shop Insurance Policy?

To file a claim:

1. Inform the Insurer: Notify your insurance provider within 24 hours of the loss.
2. Report to Police: File a report in case of burglary or theft.
3. Call Fire Brigade: Contact authorities immediately in case of fire.
4. Submit Claim Form: Complete and submit the claim form with relevant documents to the surveyor.