Why is Shop Insurance Important?

Why is Shop Insurance Important?

Shop insurance is a crucial policy for various shop owners. An individual running a shop must purchase the insurance policy to obtain the indemnification. It protects the policyholder against several kinds of risks. This includes fire, theft, flood, damage, etc. It is immaterial what kind of shop an individual owns. It is always in the best interest of people to purchase the policy in order to avoid the aforementioned risks.

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Importance of Shop Insurance Policy

Protection against Fire Incidents

Fire incidents have become common nowadays. India reported 1.6 million fire incidents in 2021. In addition, Delhi alone witnessed 16,500 fire incidents which caused 82 lives. 722 people sustained minor and severe injuries due to the fire incidents reported in Delhi. It is important to note that most of the fire incidents generally occur at factories and shops. One may cover the factories under the property or shop insurance policy. However, people generally neglect or override taking a shop insurance policy. An individual running a factory or big or small shops must purchase a shop insurance policy to indemnify the shop against fire and other perils.

As per the India Risk Survey report submitted in 2021, fire is considered as the fourth disruptive risk. The repercussions of such risks must be avoided by purchasing the shop insurance policy.

Comprehensive Protection

The shop insurance policy offers comprehensive protection. It covers the property or shop and the articles kept inside of it. When an individual purchases the shop insurance policy, he fetches the coverage for both the shop and its merchandise.

Peace of Mind

The shop insurance policy offers peace of mind to the shopkeeper or policyholder. A policyholder need not worry about the risk or incidents which may ensue at the shop. In addition, he also does not need to fear any dispute involving a third party. The shop insurance policy is designed to deal with every event which comes under its purview.

Protection of Earning

It is important for a shopkeeper to protect the earnings he makes on a daily basis. The income generated by selling goods might be a primary source of earning for many individuals. Hence, the shopkeeper must purchase the shop insurance policy to protect the earnings against robbery, theft or other unforeseeable incidents.

Affordable Policy

Shop insurance is an affordable policy which offers effective coverage. Its premium is another reason people should purchase the shop insurance policy.

Who needs a Shop Insurance Policy?

Let us discuss the need for a shopkeeper policy in order to further understand the importance of investing in the shop insurance product.

Independent Retailers

Self-employed shopkeepers heavily rely on their shops or stores for their livelihood. Thus, it is an essential step to protect the livelihood by intercepting an unexpected event. In order to avoid unforeseeable events, people must purchase the shop insurance policy. Therefore, by purchasing the shopkeeper policy, an individual protects his livelihood.

Shop at Prime Location

Owning a shop at a prime location may generate a huge income for a shopkeeper. However, it may also invite various kinds of expected and unexpected risks. A shopkeeper may prepare for the expected ones. However, it is not expedient to deal with the unforeseeable risks. Hence, people must purchase a shop insurance policy in order to deal with such risks. The insurance policy works as a backup to deal with such incidents.

High-Risk Business

The shop insurance policy is an ideal choice for an individual running a high-risk business. For example, a business dealing with electronics items or CNG fuel is prone to fire, theft and other associated perils. In case of a minor incident, they may face a huge financial loss which may lead to disruption in their business. In addition, such incidents may also close the business. In order to avoid such risks, an individual must purchase a comprehensive shop insurance policy.

Owners of Multiple Shop

It is not easy for an individual to manage multiple shops at a time. The shopkeeper is likely to experience an emergency due to multiple stores. Thus, such individuals must purchase the shop insurance policy. It is immaterial how many shops an individual owns, the policy offers comprehensive policy.

Conclusion

The retail world is dynamic. It may invite several kinds of risk that a shopkeeper must evade. The shop insurance policy is the need of shopkeepers which add value and protect the business from unexpected events. It protects the shop against fire incidents and ensures that the policyholder receives appropriate compensation in case of loss or damage. In addition, the shop insurance policy provides the peace of mind to the independent retailers. It is an affordable policy which safeguards high-risk businesses.

FAQs

Q. Who needs a shop insurance policy?

A shop insurance policy is the requirement of every individual running a big or small shop. It becomes an essential policy when the shop’s earning is the primary source of income for a family.

The following people need the shopkeeper insurance policy.

  • Family Business: An individual owning or managing a family shop must purchase the shop insurance policy. A family might depend on the shop for their livelihood. The family business generally includes the selling of selective products. This includes toys, accessories, household items, clothes etc. The shop insurance policy ensures that the shop is indemnified against any financial loss that a business may incur due to the risks covered under the policy.
  • Independent Retails: Shop insurance policy is a crucial product for individuals running a shop which is their primary source of income. Any risk associated with the nature of the shop may draw the individual close to the financial crisis. Therefore, an individual must ensure safety against such risks by purchasing a shop insurance policy.
  • Shop at Prime Location: It is important to note that a shopkeeper who owns a shop at a prime location may earn or generate a considerable income. However, one must not avoid the risks associated with such areas. The shops at prime locations are associated with different kinds of risks. This includes fire, theft, robbery, etc. Therefore, the shopkeeper must purchase the shop insurance policy to avoid such risks.
  • Multiple Shop Owners: A multiple shop owner may not manage every shop located at different places. He may experience various kinds of risks in order to run such shops. However, ensuring the safety of such shops under the shop insurance policy may help the individual avoid every risk. The shop insurance policy offers comprehensive coverage against unforeseeable circumstances.
  • High-Risk Business: Some businesses are susceptible to various kinds of risks. This includes the electronic, CNG fuel and jewellery business. It is essential for the shopkeeper to ensure the safety of such businesses by purchasing the shop insurance policy.
Q. How to file a claim under the shop insurance policy?

A. Here are the following steps which guide a policyholder to file a claim against the loss or damages caused.

  • The policyholder must make a call to the insurance companies to inform them about the incident which has caused damage to the shop. In addition, the policyholder should also write an email describing the extent of loss or damage he has faced.
  • Many insurance companies have started sending self-inspection links to the policyholder which helps them upload videos or photos of the incidents. A policyholder applying for the claim online shall be sent such a link. He is expected to click the photos and shoot videos of the incident and upload them on the link.
  • After completing the self-inspection, the insurance company shall assess and verify the loss which has been caused to the policyholder. The insurance company shall appoint an assessor if the loss cannot be assessed digitally.
  • The insurance company shall inform the policyholder if it needs any additional information regarding the incident. This includes a copy of FIR or complaint made or lodged by the policyholders, purchase documents, invoices, etc.
  • If the loss is verified by the insurance company, it shall make the payment to the policyholder and settle the claim.
Q. What are the types of shop insurance policies?

A. Here are the types of shop insurance policies.

  • Building insurance: The building insurance is one of the shop insurance policies which offers coverage to the building or shop against flood, fire, earthquake and associated perils.
  • Business content insurance: This type of shop insurance policy offers coverage against the damage caused to the interior elements of a shop. This includes fixtures and fittings, furniture and other equipment.
  • Equipment insurance: This type of policy covers the equipment that an individual needs to run the business or shop. This includes machines, stock, mechanical tools, computers, etc.
  • Employer’s liability cover: This offers protection to the employer in case the employee or staff sustain any injuries or if the employee files any case against the employer.
  • Public liability cover: A customer or an individual visiting a shop may sustain injury due to the negligence of the shopkeeper. Under such circumstances, the shop insurance policy shall offer coverage against a claim made by a third party.
  • Product liability insurance: A customer or social worker may sue an individual or the policyholder if he finds any issue with the product he purchases from the shop. The shop insurance policy shall appoint an attorney and offer legal coverage to the policyholder.
  • Stock insurance: This type of policy offers coverage to the policyholder in case of damage of stock due to flood, fire or other associated perils.
  • Business interruption insurance: If the business faces any interruption, the shop insurance policy shall offer coverage against the loss sustained by the business due to interruption.
Q. What is the important coverage or protection that the shopkeeper insurance policy offers?

A. The shopkeeper insurance policy offers the following protection to the policyholder.

  • Structural damage: It offers appropriate compensation in case of loss or damage caused to the structure of the shop. This may happen due to fire, burglary, lightning, explosion etc.
  • Cash loss: A cash transit within a 25km radius of the business shall be covered under the shop insurance policy. Hence, in case of loss of the cash, the insurance company shall offer the compensation to the policyholder.

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