Shop insurance

A straightforward look at protection for your shop

Shop insurance is a package of covers that helps protect retail businesses from costly risks like fire, theft, accidental damage, and claims from customers or employees. It is not a one-size-fits-all product. The right policy is built around what you sell, where you operate, how you store stock, and how many people you employ. For smaller, low-risk premises, prices can start at roughly £13 per month, while larger shops with higher footfall, more staff, and valuable stock tend to pay more.

In 2025, the UK market is broadly competitive, with average rates falling in several lines. That can make comprehensive protection more attainable, but it does not remove the underlying risks. Fire and explosion remain the largest causes of insured loss for UK businesses, and claims inflation continues to push up repair and replacement costs. Getting your sums insured right is therefore essential if you want your cover to pay out in full.

Insurance can offer real financial protection, but only when you understand what is covered - and where the gaps are.

A clear policy can support continuity if the worst happens. Property cover repairs your premises and fittings. Business interruption can replace lost income while you recover. Public and employers’ liability deal with injury or damage claims. Today, cyber cover is also increasingly relevant for shops using point-of-sale systems and online ordering.

Sadly, many UK SMEs have no insurance at all, and a significant majority may be underinsured. This guide explains the main cover types, what affects cost, and how to avoid common pitfalls. Our aim is to help you make confident, informed choices that fit your needs and budget, without paying for features you do not require.

A simple rule: buy the cover you need, at limits that reflect real replacement costs, and review it regularly.

What is covered in practice - and what is not

A typical shop policy groups several protections into one contract. Buildings insurance is relevant if you own the premises; otherwise, your landlord may insure the structure and you focus on tenant improvements. Contents and stock cover protect fixtures, fittings, and the goods you sell against events such as fire, storm, flood, and theft. Business interruption is designed to replace lost gross profit and help pay ongoing costs while you rebuild or relocate after an insured event. Public liability covers injury or damage claims from customers and passers-by, while product liability helps with claims linked to goods you sell. If you have staff, employers’ liability is a legal requirement in most cases.

There are also optional elements. Goods in transit can protect stock while it is being delivered. Money cover addresses theft of cash on the premises or in transit, usually with daytime and safe limits. Cyber insurance can help with data breaches, ransomware, and system outages that stop you trading. Some policies also include deterioration of stock for chilled and frozen goods.

All policies carry exclusions and conditions. Common exclusions include wear and tear, gradual deterioration, and deliberate acts. Theft often requires evidence of forcible and violent entry, and some areas have security conditions like approved locks, shutters, or alarms. Flood cover may be restricted in high-risk zones. Business interruption needs accurate sums insured and realistic indemnity periods. If your POS systems or website are disrupted by a cyber event, you typically need separate cyber cover for full protection. As for claims, insurers usually expect prompt notice, steps to limit further loss, and supporting evidence such as invoices, inventory records, and CCTV where available.

Is this cover right for you

Shop insurance is most suitable for bricks-and-mortar retailers of all sizes, from kiosks and boutiques to convenience stores and multi-branch chains. It is particularly valuable where you hold significant stock, rely on a physical location for trade, or interact with customers on-site. If you employ staff, employers’ liability will likely be mandatory, and combined packages can be a cost-effective way to meet legal and operational needs.

If you are a very small trader working from home with no customers visiting, minimal stock, and no employees, a dedicated shop policy might be more than you require. A home business or contents extension could be more appropriate, subject to your home insurer’s acceptance. For online-only retailers, cover should focus on stock at storage locations, liability, and cyber risk rather than physical footfall. The key is to match the policy to your actual exposures and avoid paying for benefits you will not use.

Choosing cover that fits - from essentials to extras

1. Entry-level package

   • Core: Contents and stock, public liability, basic business interruption.
   • Best for: Small, low-risk shops with modest footfall and straightforward stock.
   • Consider: Security requirements and realistic stock limits to avoid shortfalls.

2. Standard combined

   • Core: Contents, stock, tenants’ improvements, public and product liability, business interruption with suitable indemnity period.
   • Options: Goods in transit, money, freezer breakdown.
   • Best for: Most high street retailers seeking balanced cover at competitive pricing.

3. Comprehensive tier

   • Core: All standard features plus accidental damage, wider perils, higher liability limits.
   • Options: Cyber, equipment breakdown, seasonal stock increase, loss prevention services.
   • Best for: Larger shops, premium goods, or those in higher-risk locations.

4. Optional add-ons to tailor

   • Cyber and data protection - helps with breach costs, system restoration, and business interruption after a cyber event.
   • Employers’ liability - required for most employers, covers injury or illness claims from staff.
   • Business interruption uplift - extended indemnity period and accurate gross profit basis to reflect supply chain delays.
   • Legal expenses - support for contract disputes, employment issues, and tax investigations.
   • Stock deterioration - chilled and frozen goods following equipment failure or power loss.

Short standout tip: Match your sums insured to today’s replacement costs - not last year’s prices.

What it costs and why prices vary

Pricing snapshot: UK commercial insurance rates fell on average in early 2025, particularly in property. Casualty pricing is more mixed, with small increases in some areas, while cyber has been trending down. Despite this, claims inflation and rising repair costs mean limits should be reviewed to stay in line with current replacement values.

Who can apply and what insurers look for

Most UK shops can obtain cover if they operate legally, maintain appropriate security, and are transparent about what they sell and how they trade. Insurers typically ask for details of your premises, construction type, security protections, stock types and values, turnover, number of employees, prior claims, and any licensing requirements. You may need to provide proof of alarms or shutters, electrical certificates, and up-to-date risk assessments.

Applications can be declined where there is a history of frequent or severe losses, poor security, unspent fraud or serious criminal convictions, or if the business involves prohibited goods. Cover can also be limited in areas with significant flood exposure or for stock that is highly susceptible to theft unless enhanced protections are installed. Being open and accurate helps insurers price fairly and prevents issues at claim time.

From quote to claim - simple steps to follow

1. Gather details on premises, stock values, turnover, staff, and security.
2. Get multiple quotes with identical limits and indemnity period settings.
3. Compare core covers, excesses, exclusions, and conditions line by line.
4. Right-size sums insured using current replacement and stock costs.
5. Decide on optional add-ons like cyber, transit, or legal expenses.
6. Purchase the policy and set reminders for renewals and reviews.
7. Keep records, invoices, and photos to evidence ownership and values.
8. If something happens, notify the insurer promptly and mitigate further loss.

The benefits and the trade-offs

Read this before you buy

Check the excess for each section and ensure it aligns with your risk tolerance. Review exclusions carefully, including any security or alarm requirements and conditions for theft or money cover. Confirm your sums insured for contents, stock, and business interruption reflect current replacement costs and realistic rebuild or recovery times. Look at seasonal stock extensions if your volumes fluctuate. Ask how renewals are priced and whether claims or inflation may change premiums. Keep records of purchases, valuations, and photos to support any future claim. Finally, confirm documentation you must provide at inception and in the event of a loss, and read your policy wording in full.

Other policies to consider

1. Home business insurance - if you trade from home without customer visits.
2. Office insurance - suitable for service-based premises with limited stock.
3. Cyber insurance - for data breaches, ransomware, and system interruption.
4. Commercial property owners’ insurance - for landlords insuring the building.
5. Product liability standalone - where manufacturing or import risks are elevated.
6. Marine cargo - if you import goods or ship stock internationally.

Common questions, clear answers

Q: How much does shop insurance cost in the UK? A: Some small, low-risk shops can start near £13 per month, but prices vary widely with location, stock value, turnover, and cover limits. Obtain comparable quotes and review limits annually.

Q: Is business interruption really necessary for a small shop? A: If you rely on your premises for income, it can be crucial. It helps cover lost profit and ongoing expenses after an insured event. Set a realistic indemnity period based on supplier lead times.

Q: Do I need cyber cover for a physical shop? A: If you use POS systems, store customer data, or take online orders, cyber insurance can help with breach costs and downtime. The market is competitive, but good controls are still required.

Q: Why do insurers ask for so much detail about stock and security? A: These factors drive risk and price. Accurate information allows fair premiums and helps avoid disputes at claim time. Evidence of security and inventory control supports better terms.

Q: What if I underinsure my stock or contents? A: Many policies apply average, which reduces payouts in line with underinsurance. Valuing items at current replacement cost and reviewing regularly helps protect your claim.

Q: Are rates going up or down in 2025? A: Overall rates have softened in several lines, especially property, while some casualty pricing has ticked up slightly. Market conditions can change, so comparing at renewal is sensible.

What you can do now

If you are ready to compare, gather your key details and request like-for-like quotes with consistent limits. Read the wording, check excesses and conditions, and adjust sums insured to match today’s costs. Take your time - you are in control and can revisit options as needed to get the right fit.

Important note

This guide provides general information, not personal financial advice. Policy terms and pricing vary by insurer. Always read the schedule and wording carefully, confirm eligibility, and check that cover limits and conditions match your specific business needs.