Grocery Store Insurance
Getting insurance for your grocery store is essential.
Grocery stores need to be protected against claims arising from things like slip and fall accidents, product liability, and false advertising.
For example, a food product sold by your grocery store causes illness to a customer, or a shelf falls and injures a customer.
We’ll help you find the most personalized and affordable coverage for your unique business.
Recommended: Next Insurance is dedicated to matching small businesses with the right policy at the best price.
Best Insurance for a Grocery Store
General liability insurance is — generally speaking — one of the most important insurance policies for grocery stores.
Some of the risks general liability insurance covers are:
- Bodily injury
- Property damage
- Medical payments
- Legal defense and judgment
- Personal and advertising injury
In order to ensure that your grocery store is fully covered against the range of risks it could face, it may be worth exploring some of the following supplementary policies:
- Commercial property insurance: This policy protects the large investment your grocery store will have made into its physical assets (e.g., the storefront and inventory) from threats such as natural disasters, fires, and theft.
- Workers’ compensation insurance: Protects your staff from the various hazards that they face in the workplace on a daily basis (e.g., heavy lifting and slippery floors) and the lost wages/medical costs these entail.
- Business interruption insurance: In order to generate revenue, grocery stores require steady operations in order to generate income. This policy shields your store in instances where unexpected events cause an interruption in its operation.
The next important step in protecting your grocery store is to find an insurance provider that meets your needs. There are typically two general choices available to you:
- Traditional brick-and-mortar insurers — Includes the likes of Hiscox, The Hartford, and Nationwide.
- Online insurers — Includes firms such as Next and Tivly.
We tend to recommend online insurers to small businesses as they offer a better means of acquiring reliable and customized insurance for a low price.
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Cost of General Liability Insurance
The average grocery store in America spends between $500-$1,200 per year for $1 million in general liability coverage.
Compare the average cost of general liability insurance for a grocery store to other professional industries using the graph below.
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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Common Situations That General Liability Insurance May Cover for a Grocery Store
Example 1: The walkway into the grocery store is covered with ice, leading to a customer falling and injuring their head. General liability insurance may cover the medical bills for the injured customer as well as any other claims related to the incident from a lawsuit. It may also cover any settlements from the case.
Example 2: A customer purchases fresh chicken, eats it, and suffers an illness from food poisoning. The grocery store’s in-house butcher prepared the product but failed to follow proper sanitation rules, leading to the illness. The general liability insurance policy is likely to cover the losses associated with the customer’s medical bills, lawsuits filed against the company related to the incident, and settlements related to it.
Example 3: A customer uses a curbside-pickup service offered by the grocery stores, but an employee mistakenly pushes a grocery cart against the vehicle, creating a significant dent to the vehicle, requiring replacement of the vehicle’s side panel. The general liability insurance policy may help cover the costs associated with the repairs.
Other Types of Coverage Grocery Stores Need
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 of the most common types of coverage:
Commercial Property Insurance
Nearly all grocery stores require commercial property insurance to aid in covering the building itself. This type of policy may also help cover equipment, inventory, and computer systems. It may also help cover expenses in the event of a fire or weather event. A simple storm could cause a wide range of damage to the building, putting inventory and equipment at risk. Most often, commercial property insurance is a component of a business owner’s policy (BOP). Any building owned by the company may benefit from this coverage.
Workers' Compensation Insurance
Grocery stores employing individuals may need workers’ compensation insurance. Some states require it if the location has a specific number of employees. However, it can help minimize financial loss to a company of any size. It provides coverage for on-the-job injuries. Employees may suffer injuries from using equipment or falling on wet surfaces. This policy can help to cover medical bills, lost time at work, and other associated financial losses.
Business Interruption Insurance
Grocery stores provide an important service to the community, making their operation valuable. A fire or other covered incident, though, can leave the location unable to operate for a significant length of time as repairs take place. Yet, they have financial obligations to vendors and employees during that downtime. Business interruption insurance may help cover those costs as well as cover a move to a secondary location if deemed beneficial. It can help the organization to minimize loss during this time and maintain both employee and vendor contracts.
Additional Steps To Protect Your Business
Although it’s easy (and essential) to invest in business insurance, it shouldn’t be your only defense.
Here are several things you can do to better protect your grocery store:
- Use legally robust contracts and other business documents. (We offer free templates for some of the most common legal forms.)
- Set up an LLC or corporation to protect your personal assets. (Visit our step-by-step guides to learn how to form an LLC or corporation in your state.)
- Stay up to date with business licensing.
- Maintain your corporate veil.
Grocery Store Insurance FAQ
Yes, absolutely. You will need to first get a quote from an online business insurance provider like Next Insurance. Next allows you to then purchase a policy immediately and your coverage will be active within 48 hours.
A typical business owner’s policy includes general liability, business interruption, and commercial 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.
"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.
Yes. It is vital that your grocery store acquires business insurance before launching, as it will encounter liabilities from the get-go.
In fact, it is highly likely that certain policies will be an operational requirement for your business to be considered as run legally. Some of these could include workers’ compensation and commercial auto insurance.
Not necessarily. Certain exceptions may be written directly into your grocery store insurance policy, and some perils may be entirely uninsurable.
Yes, an LLC is meant to create a legal barrier between your business and your personal assets and credit. If you haven’t formed an LLC yet, use our Form an LLC guide to get started.
An LLC doesn’t protect your business assets from lawsuits and liability– that’s where business insurance comes in. Business insurance helps protect your business from liability and risk.