Shopkeeping can be laborious. You need to maintain a constant supply of stock, ensure every customer has a good experience, and hire capable employees. On top of all this, shopkeepers have to deal with a large number of risks every day. These include the risk of fire burning down their business, a thief burglarizing their shop, and much more.
To guarantee smooth and uninterrupted business activity, shopkeepers need insurance to bear these prevalent risks. Now, all of the risks faced by shops and small businesses can be insured under specific insurance policies such as Fire and Allied Perils Insurance, Burglary and Theft Insurance, and General Liability Insurance, among several others. However, purchasing a separate policy for each risk can become expensive and time consuming.
To make insurance a smooth and easy experience for such small business owners, insurers offer a package policy known as Shopkeeper’s Insurance. This package insurance policy is a combination of individual policies like Fire and Allied Perils Insurance, Burglary and Theft, etc. that collectively cover all the risks a shopkeeper may face in their day to day operations.
Package policies are preferred by small business and large corporations alike on account of their cheaper premium and the fact that they provide extensive coverage under a single policy.
Shopkeeper’s Insurance is an ideal package policy for those businesses that regularly face risks of fire and allied perils, burglary, loss of money, third party liabilities, etc. and who want to get coverage for all these common risks under a single policy. The following businesses can greatly benefit from it :
- Family businesses - Family businesses that operate a shop or a line of shops selling products like clothes, footwear, furniture, etc.
- Individual shop owners - Shopkeepers or shop owners whose primary source of income is their shop
- Chainstore owners - Shopkeepers that operate or oversee multiple shops
Shopkeeper’s Insurance has the following individual policies in its scope. This Insurance covers all risks and events that are covered by each of the underlying policies.
Fire and Allied Perils - this provides coverage to the business’s assets including building, plant and machinery, stock and other contents against fire and allied risks. These risks include FLEXA, STFI, RSMD, earthquakes, missile testing operations, forest fire, landslides, terrorism, etc.
Burglary, Housebreaking, Larceny, and Theft - this provides coverage for loss or damage to shop’s contents (excluding money and valuables) due to housebreaking and theft. However, this cover excludes instances where the insured, their partner or employee is responsible.
Money - this includes three covers- (i) Cash in Transit, where money is lost or stolen due to an accident or misfortune between any two places while it is being carried by the insured or their authorized employee; (ii) Cash in Safe, where cash stored in a steel cupboard, steel box or a strongroom under lock and key is stolen during housebreaking; (iii) Cash in Till, where cash stored in the counter is stolen during business hours following violence or threat.
Pedal Cycle - this cover extends security to a pedal cycle owned by the insured business. Any loss or damage to the bicycle due to fire and allied perils, housebreaking, and theft is covered. Here, third party liability coverage for accidental death, injury, or property damage is also provided.
Plate Glass - this provides coverage for accidental breakage of fixed plate glass (plain & ordinary glaze quality) in the insured building. Here, damage to the glass framework along with the embossing, and ornamentation of the plate glass can be covered.
Neon Signboard - this extends coverage to loss or damage caused to Neon Signboards (glow signs) by accidental events like fire, lightning, explosion, malicious damage, riots, etc.
Baggage - this covers loss or damage to the insured’s personal baggage and any accompanied baggage related to the trade while travelling beyond the municipal limits of the resident city/town. However, loss of cash, jewellery, consumable goods, or loose articles is not covered.
Personal Accident - this cover includes death or bodily injury suffered by the insured or their employees due to external accidental means. This cover is provided as per the Personal Accident Guidelines issued by the IRDAI (Insurance Regulatory and Development Authority of India)
Fidelity Guarantee - this covers direct monetary loss to the insured caused by an act of fraud or dishonesty (such as forgery, embezzlement, larceny, etc.) conducted by the an employee of the insured
Public Liability - this covers the insured’s legal liability in the event of bodily injury, death or property damage caused to third parties due to business activities or on business premises
Workmen’s Compensation - this covers the insured’s legal liability to pay compensation to its employees and workers in the event of a workplace accident causing death, injury, disability, or hospitalization
Business Interruption - this extends coverage to the business’s loss of gross income, increased cost of working, or additional expenses caused by the occurrence of some unforeseen events
Some insurers also offer an Electronic Equipment cover within a Shopkeeper’s Policy. This covers loss or damage to electronic equipment such as computer systems, CCTV systems and related gadgets.
This policy also supports the extensions or add-on covers offered by the individual policies on payment of extra premium.
Shopkeeper’s Insurance Policy excludes from its scope of coverage all the risks and assets that are specifically excluded under all individual insurance policies. This means that the exclusions mentioned in each of the underlying policies (Fire and Allied Perils Insurance, Burglary and Theft Insurance, Personal Accident Insurance, etc.) will also be excluded from the Shopkeeper’s Policy.
Some of the general exclusions are listed below :
- Liability arising out of the violation of any rule or regulation laid down by the Government or a Statutory Authority
- Loss or damage due to war and related perils
- Loss or damage due to ionizing radiation and nuclear perils
- Loss or damage to the insured property by pollution or contamination
- Faults in electrical appliances existing at the time of commencement of policy or manufacturing defects that were known to the insured
- Wilful act or gross negligence of the insured, resulting in loss or damage
- Injury or death resulting from participation in dangerous sports/hobbies, use of alcohol/intoxicants or resulting from HIV/AIDS
- Normal and gradual wear and tear of insured property including depreciation
- Consequential loss
In conclusion, Shopkeeper’s Insurance can provide comprehensive coverage to small shopkeepers at reasonable premium rates. This allows the business to operate uninterrupted and secured against unfortunate events.
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