Workers' compensation insurance for retail businesses

Employees are the heart of any retail business. Whether you run a computer store or a thrift shop, your employees answer questions, sell your products, and keep everything running smoothly. However, accidents can happen even in the safest workplace.

When an employee suffers a workplace injury, workers’ comp insurance helps cover medical expenses, lost wages, and more.

• Immediate medical costs, such as emergency room expenses
• Ongoing medical costs, such as medications
• Partial lost wages while the employee is recovering

Employer’s liability insurance, which is typically included in a workers’ comp policy, provides protection when a drug store clerk, florist assistant, or other retail employee decides to sue a business owner over an injury.

Employer’s liability insurance can help cover:

• Attorney's fees
• Court costs
• Settlements

Without proper coverage, you could find yourself paying out of pocket for a legal defense, even if there’s no real basis for the lawsuit. Employer’s liability insurance, however, does have limits to how much it will pay for a claim.

The amount you pay for workers’ compensation is a specific rate based on every $100 of your business’s payroll. Your premium is determined by the type of work done by your employees (classification rate), your experience modification rate (claims history), and your payroll (per $100).

The formula is:
Classification rate x Experience modification rate x (Payroll / 100) = Premium

Each state has its own laws for workers’ compensation requirements. For example, every retail shop in Nevada must carry workers’ compensation insurance for its employees – even part-time workers. However, stores in Alabama are only required to carry workers’ compensation when they have five or more employees.

Sole proprietors, independent contractors, and partners don’t have to carry workers’ compensation insurance, but you can purchase a policy to protect yourself, too. It's a good idea to carry this coverage, as health insurance can deny claims for injuries that are related to your job.

In certain states, retail businesses must purchase workers’ compensation insurance through a monopolistic state fund. Those states are:

• North Dakota
• Ohio
• Washington
• Wyoming

If you purchase workers’ comp through a monopolistic state fund, it probably won't include employer’s liability insurance. However, you can buy stop gap coverage from a private insurer to gain this protection.

Whether you own a clothing store or a vape shop, retail is filled with risks. Employees can injure their back while stocking shelves, or suffer repetitive motion injuries from working the cash register. At any retail store, you can facilitate a safer work environment with:

• Safety training that includes proper lifting techniques
• Proper attire, such as closed-toe shoes and tucked-in shirts
• Rotating employees on tasks that cause repetitive motion injuries

By creating a safe work environment and managing your risks, you can decrease workplace accidents at your retail business. That means fewer claims – and a lower insurance premium.

Workers’ compensation insurance protects your employees and to some extent your business, but it doesn’t cover common risks such as property damage and customer injuries. Other recommended insurance policies for retailers include:

Business owner’s policy (BOP): This policy bundles general liability insurance with commercial property insurance, usually at a lower rate than if the policies were purchased separately.

General liability insurance: This policy can pay legal expenses related to customer property damage, customer injuries, copyright infringement, and more.

Cyber liability insurance: This policy is crucial for retailers who handle credit cards or conduct business online. It helps cover the cost of a data breach or cyberattack.

Liquor liability insurance: If your shop sells alcohol, you likely need this policy to comply with your state's dram shop laws and protect against lawsuits.

Commercial umbrella insurance: Similar to excess liability insurance, this policy boosts coverage on a retailer’s general liability, commercial auto, and employer’s liability insurance once the limit is reached.

Commercial auto insurance: State laws usually require this coverage for business-owned vehicles. It helps cover costs if your retail shop's delivery truck or other vehicle gets into an accident.

Are you ready to safeguard your retail store with workers' compensation insurance? Complete Insureon’s easy online application today. Once you find the right policy, you can begin coverage in less than 24 hours.