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Shopkeeper’s Insurance Policy

The shopkeeper insurance policy is specifically created and designed to cover all the risks and contingencies faced by small or medium-sized shop owners (SME / MSME shops). It provides protection for the property and the interests of the insured (and their promoters) in the business venture. The Sum Insured for the policy is based on the value of the shop and the value of the contents/stock of the shop. The value/sum insured of the shop is calculated on the basis of the estimated cost of reinstating (called the reinstatement value) it completely. The contents of the shop are assessed according to their value at the time of purchasing the shop insurance policy and would include electrical and mechanical appliances in the shop and the stock available on the premises.

To ensure that the promoters can focus on this primary activity, which is the business income/profit, it is necessary that they should be free from stress that is not related to trading such as accidents, fire, burglary which could hamper the business. This is where purchase of a Shopkeeper’s Policy comes in handy.
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What does a Shopkeepr’s Policy cover?

Shopkeeper Insurance Policy typically covers the following risks that any small and medium sized business is exposed to:
Type of Insurance What is covered
Fire Loss to the Building. Perils as per Standard Fire & Special Perils Policy including Earthquake Risk.
Loss to the Contents (Stock in Trade & FFF). Perils as per Standard Fire & Special Perils Policy including Earthquake.
House Breaking Loss/damage to contents (excluding Money and Valuables) by Housebreaking excluding where any partner or any employee of the insured or member of the insured family is concerned as principal or accessory.
Money (A) Loss of money due to any accident or misfortune between any two places within a radius of 25 Kilometers from the insured shop whilst in the hands of the insured &/or his authorized employees.
(B) Cash in safe / Steel cupboard / Steel Cash Box under lock & key due to housebreaking.
(C) Cash in till / Counter during business hours following assault &/or violence &/or threat
Pedal Cycle Loss/damage to pedal cycle as per Standard Fire & Special Perils Policy includinghousebreaking or theft.
Legal liability Rs.10, 000/- (Third party accidental death or bodily injury & accidental damage to property)
Plate Glass Accidental breakage to fixed plate glass (Plain & ordinary glaze quality) in the insured building.
Note: Damage to framework & other than plain glass such as embossed, silvered ornamental etc. can also be covered provided specifically declared.
Neon Sign Loss or damage to Neon sign (glow sign by accidental external means.Fire, lightning external explosion.
Baggage Loss/Damage to personal baggage of the Insured and accompanied baggage related to the trade.
Personal Accident Death or bodily injury by accidental violent, external & visible means to self & employees up to 10 times the annual salary. (Age group 16 to 65 years should only be insured Medical benefit extension at additional premium.
Weekly compensation for TTD while hospitalization.
Fidelity Guarantee Direct pecuniary loss caused by Act of Fraud or dishonesty (Forgery, embezzlement, larceny) by the employees of insured.
Electronic Equipment Insurance Electronic Equipment including Personal computers, CCTV and related equipments.
Break Down - Electrical Appliances Break down of appliances installed in the shop such as AC, Refrigerator etc.
Public Liability Legal liability of the Insured to the public for bodily injury or accidental death– Rs.2,50,000/-
Liability of Employers(Workmen Compensation) Legal liability of Insured to his employees as per WC Act.
Business Interruption Loss in respect of following items:
- Loss of Gross Income
- Expenses towards
- charge of Accountant

Some Key Features of the Shopkeeper’s Policy include:

  1. The Shopkeeper Insurance Policy may be taken for any shop of Pucca construction where the cumulative value for building and contents is up to Rs.2 (Two) Crores.
  2. No Shopkeeper Insurance Policy may be issued for showrooms and display centres where no sales are carried out
  3. Electrical & electronic goods like CCTV, Personal Computer and related equipments installed in shop of Insured may also be covered against the risk of fire, housebreaking, electrical or mechanical breakdown.
  4. Reinstatement of sum insured subsequent to loss is available for all Sections except PA, Fidelity Guarantee, Public Liability and WC.
  5. Terrorism risk may also be covered at additional premium at the opinion of Insured and sole acceptance of company.
  6. The policy carries varying excess applicable to different sections.
  7. Restaurants / cafes / Jewellery shops may not be covered.

What are some of the Exclusions under the Shopkeeper’s policy?

Some of the exclusions are below, please refer to the insurer’s terms and conditions for the complete list of exclusions.
  • Loss or damage caused by depreciation or wear and tear.
  • Consequential losses.
  • Loss or damage to property by pollution or contamination.
  • War and nuclear perils.

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