Are you a budding entrepreneur looking to enter the retail trade? Or have you been working on a market stall for many years? However long your experience in the business, getting the right insurance at the best price is an essential. It will help you maximise your profits and could protect you from financial ruin. Find out what insurance you need and how to get the best deal with our complete guide to market trader insurance.
What types of insurance do market traders need?
Whether you sell on the street, at an indoor market, are doing the festival circuit or have a regular slot at your local farmer’s market, you’ll need insurance. From the legal requirements to the plain common sense, here’s the most common insurance cover taken out by market traders:
- Public liability insurance
- If you’re selling food or drink
- Product liability insurance
- Insurance if you sell cosmetics or toys
- Employer’s liability insurance
- Stock cover
- Vehicle insurance
- Business Interruption and Personal Accident insurance
- Money cover
Public liability insurance is there to help pick up the financial pieces if someone is injured or property is damaged by anything connected to your business. For example, someone trips over a wire trailing from your stall and sues you, or your stall collapses and damages someone’s car.
Do I need to take out public liability insurance?
There is no legal obligation for you to take out public liability insurance. However, you may find it is a condition of your licence from the local council or market organiser.
- To find out if you need public liability insurance, you should speak to the local council where you wish to trade. If you don’t already have a contact, you can search for your local council.
How much public liability cover will I need?
The amount of cover you need depends on the type of business you run. Most insurers offer cover from between £1million to £10 million. To decide what you need, think about the possible level of compensation claims that you could face. For example, the largest public liability claim brought in the UK was for £24million.
- Check with the local council where you trade to see if they insist on a minimum level of cover.
Do I need public liability insurance to sell food or drink?
If you sell food or drink, public liability insurance will cover you for claims such as food poisoning or for an allergic reaction from mislabelled food. Around 2 million people in the UK have a food allergy. In extreme cases, it can cause brain damage or even death. Public liability insurance helps to ensure that you can make sure that your customers can get the money they need to deal with life-changing injury if the worst does happen.
- Don’t forget that you’ll need to register your food or drink business before you trade. You need to do this in addition to applying for your casual or permanent licence to trade.
- The law also requires that anyone handling food – whether they are making it or handing it to customers – needs to have the correct Health and Safety training.
- You’ll need to follow the principles of HACCP, which helps to ensure your business complies with good hygiene regulations. This includes keeping a diary of the essential processes you follow. You can keep the diary electronically on your device or keep a paper copy. You’ll need to keep these as your local food safety officer may ask to see these when they next visit you.
- Download the Safer Food Better Business pack
- Download a print-friendly diary insert to record your daily checks
- Finally, the Food Standards Agency has the following specific advice for anyone selling food and drink from temporary or moveable premises, such as market traders:
“Premises and vending machines must be positioned, designed, constructed and kept clean and maintained in good repair and condition in a way that avoids the risk of contamination, particularly from animals and pests, as far as reasonably practical.
- You must have appropriate facilities to maintain adequate personal hygiene. For example, facilities to wash and dry hands hygienically, hygienic toilet facilities and changing facilities.
- Surfaces that are touched by food must be in a sound condition and be easy to clean and, where necessary, to disinfect. This means that they need to be made of materials that are smooth, washable, corrosion-resistant and non-toxic, unless you can satisfy your local authority that other materials are appropriate.
- You must have adequate facilities for the cleaning and, where necessary, disinfecting of working utensils and equipment.
- If you wash or clean food as part of your business, then you must have adequate facilities to do this hygienically.
- You must have an adequate supply of hot and/or cold water that is potable (drinking quality).
- Next, you must have adequate arrangements and/or facilities to store and dispose of hygienically any hazardous and/or inedible substances, and waste (whether liquid or solid).
- You must have adequate facilities and/or arrangements for keeping food at suitable temperatures and monitoring these.
- And, You must place food in a way that avoids the risk of contamination as far as reasonably practical.”
Our 4 top tips to get the best price public liability insurance
Shop around. Different insurance companies calculate risk in different ways. Compare the costs from as many different companies as you can to be sure you’re getting the best value. If you don’t have time to do this, or don’t know where to look, use an experienced specialist insurance broker to do the legwork for you
Never just renew. Insurance companies bank on you being too busy to shop around. You can often secure a much cheaper deal than the price offered in your renewal letter
Look for a bespoke insurance product that can be tailored to your specific needs
Buy your public liability insurance at the same time as other essential insurance cover to take advantage of package deals
You have a legal responsibility to make sure that the goods that you sell are safe. Even if you take every precaution to ensure that the goods you sell are safe, things can still go wrong. Whether it is something you’ve made yourself to sell or goods you have purchased, you can end up facing legal action. Product liability insurance covers you financially if something you sell causes damage or illness to your customer and they sue you.
When are my customers entitled to a refund or exchange?
The Consumer Rights Act 2015 is applicable to all market stalls. It requires that anything you sell must be:
- Of satisfactory quality
- As described
- Fit for purpose
If you sell items that do not comply, the consumer can return the goods within the first 30 days and claim a refund. Or if the consumer has had the goods for more than 30 days they can require you to repair or replace the goods.
If a repair or replacement is not appropriate in the circumstances then a consumer can request a full or part refund and/or compensation for their losses.
Within the first six months the law assumes that the fault was present at the time of purchase unless you, the trader, can prove otherwise. After six months the consumer has to prove the fault was there at the time of purchase. However, relevant circumstances are taken into account – for example, a consumer who buys second-hand goods cannot expect them to be as good as new products.
Yes – there are extra controls and regulations governing the sale and manufacture of cosmetics and toys. If you make and sell anything that comes into direct contact with the skin, such as soap or bath bombs, or toys, get in touch with your local Trading Standards Office. These extra regulations make product liability insurance an even more prudent idea, as you never know what could go wrong.
- Find your local Trading Standards office
Do I have to take out employer’s liability insurance?
Yes. You are legally obliged to take out employer’s liability insurance if you employ any members of staff, even if they work part-time or are a member of your family. If you don’t have valid employer’s liability insurance you can be fined £2,500. The minimum level of cover is £5million.
Our top 4 tips to get the best price employer’s liability insurance
Always shop around if you want to be sure you’re getting the best price. Don’t be fooled into thinking all insurance companies will offer the same price to you. They all use different formulas to decide on risk and calculate your premium. That means you can get very similar cover and very different prices depending where you look. If you don’t know who to contact or don’t have time to shop around, use an experienced, specialist insurance broker who will so this for you
Shop around every year, not just once. Insurance companies hope you’ll be too busy to shop around every year for a new deal. But if you do just renew, you risk paying out more than you should
No one size fits all, so look for a tailored product that covers what you need without payiong for anything you don’t need
See if you can secure a better price by purchasing your employer’s liability insurance as a bundle deal with other essential insurance cover
Your business is all about selling. But what happens if your stock is damaged by fire or flood, or it is stolen? This could seriously affect your ability to trade and cause a major problem for your cash flow. Stock cover is the answer for peace of mind that you won’t be stuck with nothing to sell and no cash to buy new stocks or supplies.
Calculate the value of your stock in 4 easy moves
The sum you insure your stock for should cover the maximum total amount of stock you are likely to have at any one time:
Don’t just do an inventory of what you have at the moment. Stock quantities can fluctuate depending on how much you sell. Calculate the maximum amount of stock you may have, for example after a delivery, to ensure you don’t miss out
Bear in mind seasonal fluctuations too – for example, do you carry more stock during the summer months or in the run up to Christmas?
Stay up to date. If your business expands, make sure you tell your insurance broker so they can adjust the levels of cover for you
Remember, the amount of cover should reflect the replacement cost, not the retail value of your goods
Depending on the size of your business, you may find an inventory management tool useful.
If you use your vehicle to transport your commercial stock, you’ll need specific commercial van or vehicle insurance. Make sure you consider the following:
- Goods in transit insurance. Your stock is not only at risk from damage or theft in storage or on your stall. Goods in transit insurance ensures you’re covered financially if it is damaged or stolen when it’s in your vehicle.
- Van or commercial vehicle cover. Even if you also use your vehicle for leisure, standard personal car insurance won’t be enough. If you do need to make a claim it could be completely rejected, leaving you without wheels, which could seriously affect your business. If you rely on your vehicle, check that your insurance allows for an equivalent hire vehicle while yours is being fixed.
- Vehicle breakdown cover. It’s not just an accident that can leave you without out wheels. What happens if your van or car breaks down on the way to or from work? Commercial vehicle breakdown cover will make sure your vehicle is either fixed at the roadside or taken to a garage to be mended. If your van can’t be fixed and you need to find a van to buy or lease take a look at the offers at Vanarama or VansDirect.
If something happens and you can’t work, you won’t have an income. But you’ll still find that suppliers need paying and you’ll have to pay your living expenses too. Business interruption insurance is one of the most important types of insurance you can take out, and is designed to help tide you over financially during times when you can’t trade.
7. Personal accident insurance
Personal accident insurance is another type of cover that market traders may wish to consider if the business relies on you to trade. If you’re hurt and you can’t work, you’ll still be faced with bills to pay. Personal accident insurance offers a financial pay out for your peace of mind that you can cope financially until you’re back on your feet again.
Market stalls can be very lucrative and many of your sales may be in cash. That makes you vulnerable to theft. Money cover is designed specifically to cover larger cash amounts that could be stolen from your stall or when you’re on the way to bank it.
4 Top tips to keep your cash safe
Keep money close to you and where you can see it. A money belt is ideal for this. If you don’t have one already, take a look at money belt options
If you use a cash box instead, always keep it in one place – that way it’s easier to keep your eye on it
Keep records of your sales so you can check that the cash you’ve taken tallies up
Don’t make personal purchases form your cash box. Keep your private money and your business money separate to avoid making mistakes
If you do nothing else, do this…(3 quick tips to get the best price on your market trader insurance)
- Shop around and don’t be afraid to ask for discounts to save money. You’re a master of the art of haggling by trade – but do you ever do this when you get a quote for your insurance? If you feel out of your depth talking directly to you insurance companies, or don’t know what to ask for, get your insurance broker to do this for you. They will know what deals are out there and can negotiate hard on your behalf to get the best price without compromising on the cover.
- Check you’re not already covered. No one wants to pay out twice for the same thing, so make sure you carefully check through your various insurance policies or ask your broker to do this for you. That way you can be sure you don’t by insurance cover that you already have.
- Beware of nasty surprises in the small print. Check carefully what cover is included or talk it through with your broker. If not, you could be in for a nasty shock at the point when you make a claim.
Remember, you won’t necessarily need every type of insurance or need to do everything mentioned in this list. Grab a cuppa, sit down, and go through one by one whenever you can. Your finances will thank you for it! If you need some advice, speak to an expert