Business Stock Insurance: Protecting your Stock to Protect your Business
For many businesses, their stock is their most significant investment, some storing thousands of pounds worth of stock on-site at any one time. If this sounds familiar, and your business relies heavily on the stock you hold, it’s essential to make sure it’s well protected from risks such as damage, theft and fire.
But even with the most robust measures in place, you can’t guarantee it won’t be stolen or destroyed. Imagine the devastating impact on your business if your stock fell victim to an unforeseen disaster. Would you have the cash-flow to replace supplies and keep your business running?
What Does Business Stock Insurance Cover?
Business stock insurance will give you peace of mind knowing that the cost of replacing your supplies would be covered if the unthinkable happened: storm damage, a leaking sprinkler, lightning, a gas explosion, or water bursts for example.
The events covered by stock insurance may vary, depending on the provider, and your insurer will need to be confident the incident wasn’t a result of negligence.
It’s not just retailers that should have this insurance in place; stock insurance is essential for:
- Manufacturing businesses.
- Pubs, restaurants and takeaways, cafés and coffee shops.
- Hair and beauty salons.
How Does Stock Insurance Protect Your Business?
If your stock is destroyed – provided it’s been stored correctly and in line with your policy conditions – your insurer will pay the amount needed to replace it. Many policies include cover for goods in transit, but this isn’t always the case, so make sure you check your policy terms. Another common exclusion is frozen food, particularly losses relating to mechanical issues with freezers.
Some insurers offer stock insurance as a standalone policy; other providers offer this cover as an extension to a business premises insurance or business contents policy.
Cover on these policies typically includes any products you sell to customers. You may be asked to ensure you carry out regular stock checks and be able to evidence your records in the event of a claim. This is to make sure your insurer knows the accurate loss of stock and, therefore, the value of your payout. You must provide a precise estimation of your stock value when taking out your stock insurance policy – failing to do this could leave you underinsured.
How Much Does Stock Insurance Cost?
The amount of stock you insure and the value of your items will determine the cost of your stock insurance policy. Your insurer will also consider:
- Your business location, what your premises is made of and if parts of the roof are flat.
- The level of security you have at the property.
- Any history of flooding or subsidence at your premises.
- How much cash is on your premises overnight.
- Previous claims history.
If you have high-risk stock, expect to pay a higher premium because there’s a greater risk of theft and a higher cost of repair or replacement.
It pays to be prepared for the unexpected. Business stock insurance allows you to focus on running your business, knowing that should the worst happen, you will be able to replace the products you need to keep your business running.
Quotes from well-known and specialist insurers, including: