Shop & Retail Property Insurance
A shop is a commercial building at street level with a glass front and the public walking past it. That combination produces a distinct claims pattern: glass, ram raids, vandalism out of hours and vehicles reversing into the frontage.
The occupier's trade remains an important factor in the premium and terms, and in retail it varies enormously. A card shop and a takeaway occupy identical buildings and are underwritten nothing alike, because one of them has fryers, extraction ducting and a cooking fire risk running late into the evening.
Very often there is residential above. The moment there is, the building becomes a mixed use risk and the fire separation between the shop and the flats becomes an important underwriting consideration, even though the owner is thinking about the shop.
We can advise owners of retail premises and parades on how the building should be insured, including where the tenant's trade or a flat above needs terms the standard commercial market will not offer.
Common claims and risk exposures
The exposures that produce claims in this trade, rather than a generic list.
Glass and the shop front
Plate glass is a common source of property damage claims in a retail building, from accidental breakage, vandalism and attempted entry. Modern shop fronts are not simply glass either: toughened units, automatic doors and framing systems make replacement slower and more expensive than owners expect.
Out of hours attack
Shops are empty and visible overnight. Ram raids, forced shutters and smashed glass happen when the parade is deserted, and repeat attacks on the same unit are common enough that insurers ask specifically about previous incidents and what was done afterwards.
The tenant's trade at street level
Food, hot oil, hair and beauty chemicals, dry cleaning and vehicle related trades all sit in ordinary looking retail units. Extraction ducting above a fryer is a significant source of serious fire losses in a parade, and the ducting is often the owner's fixture.
Flats above the shop
Where there is residential above, a shop fire becomes a life safety risk. Insurers ask about the fire separation between the commercial and residential parts, separate access to the flats, and whether the flats have their own alarm.
Vehicles and the pavement
Deliveries, parking and the pavement itself put vehicles and pedestrians directly against the building. Impact damage to frontages, and liability from anything that falls from a fascia or a canopy onto a public footway, are both routine on this class.
The cover we arrange
We arrange insurance around the property, its use, construction, occupancy and ownership structure. The cover available will depend on the individual risk and the terms offered by insurers.
Buildings
The structure, the shop front and landlord's fixtures on a reinstatement basis. Where the owner has provided extraction, shutters or a canopy, those belong in the sum insured and should be identified rather than assumed.
- Structure and shop front
- Landlord's fixtures including shutters and canopies
- Extraction ducting where owner provided
- Professional fees and debris removal
Glass
Usually a distinct section because of how often it is claimed on. Covers breakage and often includes boarding up, temporary glazing and the cost of replacing signwriting or alarm foil on the glass.
- Plate glass and shop front glazing
- Emergency boarding and temporary glazing
- Signwriting and alarm foil
- Often a separate, lower excess
Property owners liability
Liability to the public from the building itself: the frontage, the canopy, the fascia, the pavement immediately outside and any retained common access to flats above.
- Falling fascia, signage or canopy
- Injury on retained access ways
- Limits typically £5m or £10m
- Defence costs included
Loss of rent
Rent lost while the unit cannot be trading. On a parade a single fire can close neighbouring units that are undamaged, so the cover should contemplate more than the building that burned.
- Rent during reinstatement
- Neighbouring units affected by one incident
- Indemnity period of 24 months or more
- Residential rent above where applicable
Unoccupied unit cover
Retail voids are common and often long. Terms for an empty unit are available but conditional, typically on inspections, isolation of services and securing the frontage.
- Terms agreed for known void periods
- Weekly or fortnightly inspections
- Services isolated and system drained
- Shutters and boarding as required
What an underwriter will ask
Having these to hand shortens the process considerably, and usually improves the terms.
- The tenant's trade in detail, and whether any cooking or hot process takes place
- Whether there is residential accommodation above, and how it is separated and accessed
- Extraction and ducting: who installed it, who cleans it, and how often
- Shop front construction, shutters, and any history of forced entry or ram raid
- Rebuild cost including the frontage, and the glass sum insured separately
- Fire and intruder alarms, whether monitored, and their certification
- Whether the unit is currently trading, and any void periods
- Flood exposure, which matters more at street level than anywhere else on this hub
What affects the cost of your insurance?
The main factors insurers consider when assessing the premium.
What the tenant sells, and whether they cook
The largest single factor. Non food retail rates well; hot food, especially with fryers and ducting, moves both the premium and the list of insurers prepared to write the building.
Residential above
Flats above a commercial unit push the risk into mixed use rating. Good separation, a separate entrance and an alarm in the residential part all help; a shared staircase and no separation do the opposite.
Glass sum insured and claims history
Glass is claimed on frequently, so insurers watch the record closely. Repeated breakage on the same frontage will usually be met with a higher glass excess rather than a refusal.
Security out of hours
Monitored alarms, solid shutters and good lighting all count on a class whose worst losses happen when nobody is there. Previous forced entry without any change afterwards is what hardens terms most.
Conditions and exclusions to consider
Terms vary between insurers, so treat these as the questions to ask rather than a description of any one policy.
The tenant's stock and contents
Stock, tills, fittings the tenant installed and their own glass within the demise are theirs to insure. After a break in the split can be contentious, particularly over a shop front the tenant has altered.
Ducting not cleaned
Where cover is written on the basis that extraction ducting is cleaned at stated intervals by a competent contractor, failing to do it is a breach of condition. On a takeaway that is usually the condition a declined fire claim turns on.
Damage during a void without agreed terms
An empty retail unit outside the stated unoccupancy period, without agreed terms, leaves theft, malicious damage and escape of water outside cover at exactly the moment they are most likely.
Gradual water ingress at the frontage
Long term leaks around shop front framing, failed flashings and blocked gutters are maintenance. It is a common source of damage on parades where the frontage has been altered several times.
Common questions
Is glass insured under the buildings section?
Often it is a separate section with its own excess, because it is claimed on far more often than anything else. Check who owns the frontage under the lease as well: where a tenant has installed their own shop front, it may be theirs to insure rather than yours.
The shop has flats above. Does that change things?
Considerably. The building becomes a mixed use risk, the fire separation between the shop and the flats becomes central to the underwriting, and the pool of insurers narrows if the occupier below is a hot food business.
Who is responsible for cleaning the extraction ducting?
The lease decides, but the insurer will impose a condition regardless and will not much care which of you carries it out. Keep the certificates: after a fire the first request is usually for the cleaning records.
The unit has been empty for months. Am I still covered?
Only on the terms agreed for an unoccupied building, which are narrower. Tell the insurer as soon as a void starts rather than when it passes the stated period, because agreed terms with inspections are usually available and are far better than discovering the restriction after a loss.
How do I get a quote from True Risk Solutions?
Call 01304 262880 and speak to a broker, or email info@truerisksolutions.co.uk with what you do, what you need cover for and a phone number with the best time to call, and a broker will call you back. We need a phone number to quote, because the cover and the price depend on questions that are quicker to answer on a call than by email.
Related trades
Speak to a specialist who understands your industry
Tell us about your business and the work you undertake, and we will come back to you with cover options built around it. Call 01304 262880, or email us with a phone number and the best time to call and a broker will ring you back.