Grocery Store Insurance

Grocery Store Insurance

Owning and running a grocery store requires a lot of skills including managing many unique risks. A customized grocery store insurance policy can protect your business and provide you with peace of mind.

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Zensurance - Grocery Store Owner
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Insurance for grocery stores

A customized grocery and food store insurance policy is essential protection for independent and specialty grocery stores in neighbourhoods across Canada. No matter the size of their operations, grocery store owners face a broad range of internal and external risks that could result in expensive third-party lawsuits or damage and loss.

What is grocery store insurance?

Business insurance for grocery stores is designed to safeguard your business from the risks you face. As small, local, independent grocery and food stores are diverse and unique, you need a policy that reflects that uniqueness and caters to your specific needs.

 A tailored grocery store insurance program features several coverages that protect you from third-party bodily injury or property damage claims or lawsuits, as well as covering your inventory, equipment, and physical store.

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What does it cover?

A comprehensive grocery store insurance policy typically includes several types of coverages, including:

  • Commercial General Liability (CGL) Insurance: CGL provides you with financial support for your legal expenses if a customer is injured inside your grocery store or elsewhere on your commercial property, such as the parking lot or entranceway. For example, if one of your customers slips and falls on a wet floor caused by a spilled product, they could sue you for negligence and third-party bodily injury. CGL is designed to pay for the customer’s medical expenses, your legal defence, and an out-of-court or court-ordered settlement. CGL also provides you with coverage for allegations of false advertising, libel, and slander.
    • CGL includes product liability coverage. It protects you against claims alleging third-party bodily injury or property damage caused by any product you sell, distribute, or manufacture (including food). For example, if there’s a product recall due to food contamination, you could be held liable if that product is sold to a customer and they are injured.
  • Commercial Property Insurance: Also known as business contents insurance, commercial property insurance protects your physical store from damage or loss due to fire, flood, theft, vandalism, or extreme weather. It also covers your grocery store’s furnishings, fixtures, electronics, and product inventory if it is damaged or destroyed by any of the above.
    • Business interruption insurance may be included in your commercial property coverage, but check to be certain, and ask your Zensurance broker to include it as a rider if it isn’t. This type of coverage provides you with financial support for the net income you lose following an insured event such as a fire that shutters your store while repairs are underway. Some expenses it may cover include employee payroll, overhead operating costs, and monthly mortgage, rent, or lease payments. You cannot purchase this coverage as a standalone policy.
  • Equipment Breakdown Insurance: Your grocery store includes expensive electrical and mechanical equipment. You need to protect it if they malfunction because of internal damage such as an electrical short or mechanical breakdown. Equipment breakdown insurance, also known as boiler and machinery insurance, provides that protection. It also covers your grocery store’s computers, point-of-sale systems and cash registers, and office equipment. Note: equipment breakdown coverage does not pay to repair or replace your equipment due to wear and tear or fire, flood, theft, vandalism, or severe weather. Furthermore, you need to have commercial property insurance to add it to your overall policy.
  • Cyber Liability Insurance: A must-have for modern businesses in any industry, cyber liability coverage provides you with financial support for damage or loss resulting from cybercrime such as a cyber-attack or data breach. If your grocery store has a website, sells goods online for customers to pick up or have delivered to them, and uses point-of-sale systems that collect your customers’ financial data and confidential information, you are responsible for protecting that data. You can strengthen your cyber liability protection by adding cybercrime insurance as a rider to your policy to provide you with funds if your business is victimized by a phishing attack or social engineering fraud.
  • Commercial Crime Insurance: Unfortunately, internal theft, fraud, and forgery are common risks grocery and food store owners face. Commercial crime insurance provides you with coverage for things like embezzlement, employee dishonesty, computer and wire transfer fraud, and forgery. You must have commercial property coverage to add this protection to your overall policy. It includes protection from the theft of money while in transit. For example, if funds are stolen from an armoured car carrier or delivery person.
  • Commercial Auto Insurance: If your grocery or food store has a delivery truck or uses other kinds of vehicles for business purposes, you need commercial auto coverage. An individual driver’s personal car insurance policy is not designed to cover incidents or accidents involving any vehicle that is used for business purposes.
  • Legal Expense Insurance: Adding legal expense coverage to your policy is a wise move. If you need to hire and retain an experienced lawyer to conduct common business transactions such as securing a financing agreement, requiring legal counsel, or wish to initiate legal action against another individual or organization, it will cost you thousands of dollars. Legal expense insurance is a comparably affordable alternative. It provides financial coverage for a wide range of legal issues including tax protection, employment disputes, contract disputes, and debt recovery.

Do candle makers need insurance?

Any independent, local grocery store or food store selling food and related items to the public needs a comprehensive grocery store insurance policy, including: 

  • Canadian military commissaries
  • Convenience and corner stores
  • Delicatessens
  • Health food stores
  • Hypermarkets
  • Limited assortment stores
  • Milk and dairy bars
  • Neighbourhood ‘mom-and-pop’ stores
  • Supermarkets

How much does it cost?

The cost of your annual premium is determined by your insurance company, which considers a wide range of factors when calculating your rate, including: 

  • Your grocery store’s location and the size of the store
  • The types of products you sell and services you provide
  • How many employees you have
  • Your years of experience as a grocery store owner
  • Your annual and projected gross revenue
  • Your insurance claims history
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Common claims scenarios

Frequently asked questions

My independent grocery store does not sell products online. Do I still need cyber liability insurance?

Yes. It is advisable to include cyber liability coverage in your overall policy, even if you don’t sell food or other products online. If you have a website, use email to send confidential information to suppliers and employees, or use point-of-sale systems, you’re still subject to the threat of a cyber-attack, data breach, or other types of cybercrime.

Is grocery store insurance tax deductible?

Yes. The Canada Revenue Agency does allow grocery and food store owners to deduct the cost of your annual grocery store insurance bill as a legitimate business expense. As business taxation laws are subject to change each year, it’s wise to speak with a certified accountant about your tax deduction options.

How do I determine how much coverage I need to have for commercial general liability insurance?

Determining your commercial general liability (CGL) coverage limit should be based on what risks you face. Most grocery and food stores purchase up to $2 million worth of CGL coverage but speak to a licensed Zensurance broker openly about your needs and concerns and the associated costs to make an informed decision.

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Your community depends on your grocery store to get the food and supplies it needs. Protect your business with a customized grocery store insurance policy through Zensurance. Fill out our online application in a few minutes to receive a free quote. Our licensed brokers will shop our partner network of more than 50 Canadian insurance companies to find you the policy you need at the best price.

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