Shops have always been the targets for thieves and since the emergence in the early nineteenth century of shopping rows, have presented their owners with various security considerations to deter organised crime. Most of these security requirements were insisted upon by insurance companies before they would underwrite the risk.
Today it is no different a risk for insurers, with the exception that the types of goods to protect and security considerations that retail outlets have to manage have changed somewhat over the years. Likewise today, all insurance companies when offering shop insurance to retailers will insist on what is known as a ‘minimum level of security’, in order for the policy to be valid.
The responsibility of making a shop building secure to the minimum level of security will usually lie with the owner of a property. If the shop is owner-occupied then the retailer will require an all risks buildings and contents shop insurance policy.
The buildings section of the policy will insist with clauses and wordings that certain thief deterrent security features are in place. Typically these include double mortice locks on doors and windows and grilles or bars where appropriate.
Most shop premises are either leased or rented and in these cases it is advisable to refer to the leasehold contract or landlord’s tenancy agreement, as to establishing the responsibility for insuring the buildings and securing the premises.
Tenants will be more concerned with protecting the shop fittings, stock and shop contents, however tenants also have a large role to play in ensuring that the shop premises are secure and will be responsible for providing additional security. Shop contents policies usually also cover any improvements a retailer has made to the interior of a building and include a fixed level of indemnity for this.
Many shop insurance packages exist on the market which offer a choice of buildings and or contents covers to choose from as part of a wider all risks package suitable for both landlords or tenants.
The shop package includes covers for risks such as business interruption, public and employers liability cover for shop staff and a range of legal and staff protection insurance covers which may occur as a result of an attack on the premises or a break-in.
All shop insurance policies will ask at quotation stage the levels of security that currently exist for the shop, however this is highly dependent upon the type of trade being carried on at the shops premises. Insurance companies will need to know the type of locks and bolts used, installed alarms, CCTV and whether security patrols are employed.
Many shop insurance companies will insist that certain approved burglar alarms are installed before offering to underwrite the risk. If the shop sells high risk goods such as high value electronics or alcohol and tobacco, then most insurance companies will insist on additional security and ask that levels of sums insured are defined for each type of high risk stock.
The premium paid for a shop insurance policy will often depend upon the security devices in place. These devices, although often initially an expensive outlay, can prove to save money over the long-term as generous discounts are available where the shop’s security meets all the insurers recommendations. This is especially true if the shop is in a high risk theft area where without doubt the insurance company will set higher minimum security requirements.