Business Insurance for Convenience Stores

All businesses, regardless of industry, face risks that should be covered by insurance. The most common and comprehensive type of policy business owners invest in is general liability insurance (or CGL).

Some of the risks CGL insurance covers are:

• Bodily injury
• Property damage
• Medical payments
• Legal defense and judgment
• Personal and advertising injury
  
  

While businesses aren’t legally required to carry general liability insurance, operating without it is extremely risky. If your business is sued, you could end up facing fees totaling hundreds of thousands of dollars (or more). Having a sufficient CGL policy in place to help compensate for these damages is the only way to prevent this type of event from devastating your business.

Of course, this is not an exhaustive list of perils a general liability insurance policy will cover, and some conditions may result in a particular peril not being covered. It’s always best to talk to your agent in-depth about the specifics of your policy to avoid blind spots in coverage.

The average convenience store in America spends between $400-$700 per year for $1 million in general liability coverage.

Check out the chart below for a snapshot of average CGL expenditure across a variety of industries:

Several factors will determine the price of your policy. These include your:

• Location
• Deductible
• Number of employees
• Per-occurrence limit
• General aggregate limit

You may be able to acquire general liability insurance at a discounted rate by purchasing it as part of a business owner’s policy (BOP) rather than as a standalone policy. A BOP is a more comprehensive solution that includes multiple forms of coverage, such as business interruption and property insurance.

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While general liability is the most important type of insurance to have, there are several other forms of coverage you should be aware of. Below are some other types of insurance all convenience stores should obtain:

Commercial Property Insurance

Convenience stores should have commercial property insurance for the physical property they own. This may include a parking lot, a building, coolers, equipment, and inventory.

Commercial property insurance can be purchased through business owners policies (BOPs).

Workers’ Compensation Insurance

Assuming your convenience store has employees, the store needs workers’ compensation insurance. This insurance covers work-related illnesses and injuries, and it’s generally required by state law if your business employs workers.

Product Liability Insurance

Businesses can sometimes be held responsible for damage or injuries that the products they sell cause. Product liability insurance protects against risks that come with selling products.

When selecting product liability insurance, make sure it covers the full range of products that your convenience store sells. Coverage for packaged foods and beverages, prepared foods and beverages, alcohol, tobacco, and non-food items should all be included if your store carries those products.

Product liability insurance can be purchased by itself or through a package policy.

In addition to the policies outlined above, there are a few other types of coverage your convenience store may require depending on certain aspects of your operations. Some of these might not apply to you, so be sure to ask your agent which policies are right for your business.

Business Interruption Insurance

Recovering from a disaster can take time, and bills often still need to be paid. Business interruption insurance may provide supplemental revenue during a post-disaster recovery period so that your convenience store can continue to pay its due bills.

Business interruption insurance can be purchased through BOPs.

Crime Insurance

Commercial property insurance usually protects against burglaries, but it often excludes theft by employees. Crime insurance provides coverage for employee theft and similar perils.

Crime insurance can be purchased by itself or through a package policy.

Liquor Liability Insurance

If your convenience store sells alcohol, it might need liquor liability insurance. This coverage shields businesses from liability suits associated with alcohol-related incidents that their customers are involved in. Whether your store is required to carry it depends on what type of alcohol is sold and the laws in your state.

Liquor liability insurance can be purchased by itself or through a package policy.

Although it’s easy (and essential) to invest in business insurance, it should not be your frontline defense. Yes, insurance will compensate for your business’ financial losses after an incident occurs, but it’s much better to avoid losses altogether.

With this in mind, here are three things you can do to better protect your business:

• Use legally robust contracts and other business documents. (We offer free templates for some of the most common legal forms.)
• Set up a limited liability company (LLC) to protect your personal assets. (Refer to our guide for step-by-step instructions on how to form an LLC in your state.)
• Streamline your business’ internal processes. This will remove unnecessary variables from common tasks and create a safe, consistent environment for conducting business.

What is included in a business owner’s policy?

A typical business owner’s policy includes general liability, business interruption, and property insurance. However, BOPs are often customizable, so your agent may recommend adding professional liability, commercial auto, or other types of coverage to your package depending on your company’s needs.

What is the difference between business insurance and general liability insurance?

“Business insurance” is a generic term used to describe many different types of coverage a business may need. General liability insurance, on the other hand, is a specific type of coverage that business owners need to protect their assets.

Do I need insurance before I start a business?

You should invest in coverage for your business before your first interaction with a customer. Although the cost of insurance may seem high for a brand new business, it’s best to be proactive when it comes to protecting your assets. After all, you can’t buy insurance to cover a loss that has already occurred.

Will insurance protect my business from everything?

Not necessarily. Certain exceptions may be written directly into your policy, and some perils may be entirely uninsurable. Be sure to discuss the scope of your policy in-depth with your agent to avoid being blindsided by holes in your coverage.