From important medication to daily essentials, the products offered by convenience and drugstores make the businesses both rewarding and challenging to own and operate. Convenience stores are often targets for crime, while professional mistakes in a drugstore can have major financial consequences. It’s essential to consider obtaining comprehensive insurance coverage to provide financial protection for your business from such a variety of risks.

What insurance coverage do I need for my convenience store? 

There are many types of coverage to consider, but these insurance policies are particularly important for convenience and drugstores:

General Liability Insurance

General liability insurance financially protects your business from claims of accidental third-party bodily injury and property damage. Your store may receive heavy customer traffic on a daily basis, increasing the exposure to accidents and customer injury. Your business could be held liable if a third party is injured on your business premises. 

General liability insurance also covers third-party bodily injury or property damage resulting from the various products sold by your business. Because your convenience store may sell consumables such as food and medication, your business carries a high risk of causing injury to your customers.

Finally, general liability insurance covers personal injuries, which can include allegations of false arrest, wrongful ejection from the property, discrimination, and invasion of privacy. Protecting your business from claims of third-party personal injury is vital because your business must regularly deal with shoplifters. 

Examples: 

• Bodily injury: Your employee forgets to put up the wet floor sign after mopping the entryway, and a customer slips and injures her hip. Your general liability insurance would cover the injured customer’s medical expenses and any legal fees if she decides to sue your business. 
• Product liability: A customer develops food poisoning after eating an expired meal purchased from your store. The product liability portion of your general liability policy would cover the costs of defending your business if the customer decides to sue. 
• Personal injury: You detain a customer that you suspect is shoplifting. After you and the police review the security footage, you realize the customer is innocent. Your general liability insurance would provide coverage for any legal fees if the customer sues your business for false arrest. 

Workers’ Compensation Insurance

Workers’ compensation insurance can help provide coverage for your employees if they are injured or fall ill on the job. Your employees may suffer injuries due to heavy lifting of merchandise, restocking items on high shelves, or robberies. Workers’ comp is essential in protecting your employees from these dangerous events.

Workers’ compensation insurance provides medical and financial benefits for employees who suffer work-related injuries or illnesses. Benefits can include rehabilitation costs, a portion of lost wages, and medical expenses. Additionally, workers’ comp provides death benefits for surviving dependents in the case of an employee death. In almost every state, workers’ compensation insurance is a required coverage for businesses. 

Example: 

• While climbing a ladder to restock a heavy item, your employee misses a step and breaks her arm as she falls from the ladder. Your insurer would cover the medical costs associated with this injury and a portion of her lost income if she is unable to work during recovery. 

Commercial Property Insurance

Refrigerators, computers, inventory, and even the building where you conduct business are all essential forms of business property that are necessary for your operations. Repairs and replacement of this property can be financially staggering for your business. 

Commercial property insurance protects the value of your business’s property by providing funds for repairs or replacement of your property if it is damaged or destroyed by a covered peril. This includes buildings belonging to or leased by your company and the contents of your building, such as furniture, equipment, and inventory. Perils commonly covered by your policy include windstorms, hail, fire, vandalism, and water damage.

Example:

• Faulty wiring causes an electrical fire, which destroys your inventory and causes significant structural damage to your building. Your insurer would provide funds to replace your inventory and repair your building.

Commercial Crime Insurance

Convenience and drugstores are often open throughout the night, with some locations even open for 24 hours. These businesses conduct many monetary transactions and are often located near a freeway or interstate. All of these factors may explain why convenience and drugstores are major targets for criminal activity such as robberies. As such, obtaining commercial crime insurance is vital.

Commercial crime insurance protects businesses from financial losses resulting from criminal acts. This includes forgery, robbery, burglary, theft, and employee dishonesty. While standard commercial property insurance policies provide some protection from criminal acts, this coverage is limited and does not cover employee dishonesty. 

Example: 

• A robber threatens your employee with a gun to steal money from your cash registers. The financial loss of this robbery would be covered by your commercial crime insurance. 

Professional Liability Insurance

If your drugstore employs a pharmacist, your business may be held liable for any of their work errors, inaccurate advice, or negligence. Professional liability insurance—also called medical malpractice insurance—protects individuals and companies from allegations of negligence or incompetence that result in third-party bodily injury, medical expenses, and property damage. Your insurer can provide for the costs of defending against these lawsuits.

Example: 

• The pharmacist employed at your drugstore misreads the label and accidentally gives a customer the wrong prescription. The customer sues your business for negligence. Your insurer would pay for the damages and legal fees associated with this claim. 

Liquor Liability Insurance

If your convenience store sells alcohol, it is necessary to obtain liquor liability insurance. You are exposed to various liability risks, so your employees must be properly trained to avoid selling alcohol to minors or selling alcohol to customers who are already intoxicated. 

You may be held liable if customers cause injury or damage to others after consuming alcohol sold by your business. This includes an intoxicated customer causing a car accident, starting a fight, or damaging someone else’s property. Your liquor liability insurance can cover damages and legal expenses in the case of a lawsuit.

Example: 

• Your employee sells alcohol to a customer who is clearly intoxicated. As the customer leaves your business premises, he hits and injures a pedestrian with his car. Your liquor liability insurance would cover the lawsuit and any resulting settlements if the injured pedestrian sues your business. 

Business Income Insurance

Because your store relies on an open business location, any damage to your equipment, building, or other business property will have a direct impact on your ability to operate and collect revenue. 

Business income insurance (also known as business interruption insurance) provides funds for loss of income and operating expenses if your business must temporarily close to recover from physical loss, damage, or destruction. This coverage includes the business’s net profits and normal operating expenses such as rent, employee salaries, and taxes. The physical loss, damage, or destruction must be the direct result of a covered peril, such as fire, lightning, explosion, theft, vandalism, or windstorm. 

Example:

• An intense hailstorm damages the roof of your store, and you are forced to close down your business until the damage is repaired. Your insurer would reimburse you for lost income, rent, and other operating expenses until the damaged property has been repaired.

Additional Coverages

• Cyber liability insurance covers financial losses resulting from cyber events such as data breaches, hacking, viruses, denial of service attacks, and more. This is an essential coverage since your drugstore may store the private health information of your customers. Additionally, your store likely engages in credit card transactions. In both instances, cyber liability coverage would be vital in protecting your customers’ personal information. 
• Commercial auto insurance covers damages if you or one of your employees are at fault in a collision while driving a company vehicle. This coverage includes medical costs if the other vehicle’s occupants are injured and damages to the other vehicle. Commercial auto insurance also covers your company vehicles if they are damaged or lost due to theft, vandalism, collisions, or other covered hazards. 
• Equipment breakdown insurance covers the repair or replacement of malfunctioned or damaged equipment. This is an important consideration for convenience and drugstores that rely on equipment such as refrigerators. Equipment breakdown insurance can provide funds to repair or replace damaged equipment, cover lost business income while the equipment is out of commission, and replace spoiled food. 
• Inland marine insurance covers products, equipment, and other forms of business property that are not tied to a fixed location and are not covered by commercial property insurance. This is important coverage for convenience and drugstores that must have inventory transported from warehouses to store locations. 

Pricing and Quotes

Pricing for business insurance will vary based on the type of insurance coverage and the risk profile of your business. Insurers consider factors such as:

• Business size
• Industry
• Location
• Number of employees
• Claims history

Businesses with higher risks will have higher premiums than those deemed lower risk. For example, a convenience store with a history of frequent claims will face higher premiums. Premiums also rise as you increase the limits of insurance. Different insurance companies have different models for rating risks, so it is worth comparing pricing across different insurers.

In order to get an accurate estimate on pricing, it’s best to get a quote from a reputable insurance company. Below we’ve highlighted a few of our trusted partners who offer coverage for convenience stores:

Provider	General Liability	Professional Liability	Business Owner's Policy
Embroker	??	??	??
CoverageSmith	??	??	??
CoverWallet	??	??	??
Hiscox	??	??	??
Thimble	??	??	??

Final Word

If you own and operate a convenience or drugstore, you may have to cope with unexpected incidents such as customer injuries, financial losses due to crime, and unavoidable natural disasters. If your business suffers from an expensive accident or lawsuit, it may be difficult to continue operations. Make sure you financially protect your business by obtaining comprehensive business insurance.