Why is insurance a must for convenience stores?
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6 insurance policies every convenience store should consider
Business owner's policy
A business owner's policy, or BOP, is an inexpensive way for convenience store owners to buy general liability coverage and commercial property insurance together.
- Slip-and-fall injuries
- Business property damage and theft
- Business interruption coverage
General liability insurance
A general liability insurance policy defends convenience stores against third-party lawsuits, such as a customer who trips on a step and suffers an injury. It's often required for a commercial lease.
- Customer bodily injuries
- Accidental damage to a customer's property
- Advertising injuries, such as libel
Workers' comp insurance
Workers' compensation insurance protects store owners and sole proprietors from work-related medical bills that health insurance won't cover. Most states require this coverage for your employees.
- Medical expenses from workplace accidents
- Disability benefits for injured workers
- Legal costs from work injuries
Cyber insurance
This liability policy covers the cost of cyberattacks and data breaches that expose customer information. It's also called cyber liability insurance or cybersecurity insurance.
- Data breach investigations
- Customer notification costs
- Fraud monitoring services
Commercial umbrella insurance
This policy covers costly lawsuits that exceed the limits on your general liability, commercial auto, or employer's liability insurance. It activates when the underlying policy reaches its limit.
- Customer injuries
- Auto accidents
- Employee injuries
Commercial auto insurance
Almost every state requires commercial auto insurance for business-owned vehicles. It covers costs in the event of an accident involving a delivery truck or other company vehicle.
- Legal fees from an auto accident
- Vehicle vandalism
- Vehicle theft
Convenience store insurance costs
From our customer data, here's a quick look at average business insurance costs for convenience stores and related businesses:
General liability: $48 per month
Business owner's policy: $160 per month
Workers' compensation: $75 per month
Factors that can influence your insurance premiums include:
- Type of business, such as car washes, gas stations, or corner stores
- Business income
- Number of employees
- Value of your business property
- Types of insurance purchased
- Policy limits and deductibles
- Claims history
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Common questions about business insurance for convenience stores
Will property insurance cover my convenience store if it's forced to close temporarily?
Gas stations and convenience stores are famous around the United States for being open and reliable, even in the middle of the night or on holidays. However, unforeseen circumstances, such as storms, fires, or burst pipes, may cause your convenience store to close temporarily.
Consider a business interruption insurance policy to protect against the loss of revenue from an unexpected closure due to a covered property claim. You can easily add this endorsement to your commercial property insurance and business owner’s policies.
Business interruption insurance helps with relocation costs, rental payments, income loss, employee wages, and covered expenses that accrue in the midst of a temporary closure. It won't pay for actual physical damage or repairs to your building or property. For that, you'll need commercial property insurance, which you will already have if you have business interruption insurance.
Are convenience stores required to carry product liability insurance?
Your business could face legal action if a customer is injured or has a negative reaction to a product you sell, even if it's not your fault. For example, if a customer consumes a food item or beverage that causes an allergic reaction or other adverse effect, you could find yourself facing a lawsuit.
Even if the issue that caused the injury or illness occurred at the factory, warehouse, or during distribution, you could still be held liable. Even if you aren’t found legally responsible, frivolous lawsuits can get expensive.
Many convenience store owners elect to carry product liability insurance for this very reason. Insurance companies often include product liability as part of their standard general liability policy, but it can also be purchased as an endorsement.
Product liability insurance usually doesn't cover product spoilage or contamination. An additional spoilage endorsement would need to be purchased to avoid the lost income from damaged inventory resulting from an electrical or power failure.
Does convenience store insurance cover theft of property?
Shoplifting and theft are common problems for convenience stores. Small business owners can incur significant financial losses from the theft of business equipment, inventory, and other property.
Two specific policies can help in the event of theft:
- Commercial property insurance covers items that are stolen, damaged, or lost. It covers the physical building itself as well as many of its contents. You can bundle commercial property coverage with a general liability policy in a business owner's policy (BOP), saving you money.
- Employee dishonesty coverage protects your business in the event that one of your employees steals from the company. You can add this coverage to a BOP or a commercial property insurance policy.
- Fidelity bonds can be purchased as a type of employee dishonesty coverage. This bond helps your business if one of your employees steals from a customer or other third party while at your store.
Many safeguards, such as security cameras and EAS systems, can help prevent theft. However, despite these safeguards, theft does routinely happen. The right insurance policy can give you peace of mind if a theft occurs.
What other insurance coverage do convenience stores need?
Consider the following additional coverage options to protect your convenience store from common risks and liabilities.
- Liquor liability insurance is a must if your convenience store carries alcoholic beverages. If any bodily injuries occur related to alcohol your convenience store sells, you could be held liable. Most general liability policies exclude alcohol-related incidents and won't cover lawsuits related to alcohol use.
- Equipment breakdown coverage helps with costly repairs related to business property breakdowns and malfunctions. Convenience stores often rely on large equipment, such as industrial refrigerators and soft drink machines, so this policy is crucial for avoiding financial losses due to heavy equipment breakdowns.
- Electronic data processing (EDP) insurance assists with the costs associated with computer data losses from events such as power failures and electrical surges.
- Employment practices liability insurance (EPLI) covers legal expenses if an employee sues your convenience store claiming discrimination, wrongful termination, harassment, or other covered workplace incidents.
- Hired and non-owned auto insurance (HNOA) is necessary if you or your employees use personal vehicles for work-related activities. Commercial auto insurance only covers vehicles specifically owned by the company and will not cover personal, leased, or rented cars.
Each of these policies can address different needs that are specific to gas stations and convenience stores and can help save your business money. You can speak with a licensed insurance agent to receive free quotes from the nation's leading insurance agencies.
