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CNA Blog — From the Experts

Published Sunday, November 5, 2017

You’re the Boss: Insurance Concerns for Small Retail Employers

Trustworthy, dependable employees are crucial to your store success. While we want to believe that all our employees are honest and respectful, it's also important to guard against any problems that can be posed by those who are not.

An employee handbook is essential for sketching out your expectations for sales associates and defining exactly what constitutes unacceptable behavior. Being clear with your employees can help avoid future workplace disputes. Retailers should have employees sign the handbook as confirmation that they were made aware of the policies inside. That makes it easier for employers if they do need to take disciplinary action or move toward termination. An employee handbook helps set the ground rules. Free coffee is fine. Free shoes are not fine.

Employee Handbook Basics 
The retail employee handbook can cover a range of policies and expectations, including, but not limited to:

  • Hiring and firing
  • Punctuality and missed shifts
  • Commitment to a drug and alcohol-free workplace
  • Maternity policy
  • Disability policy
  • Vehicle use — especially if employees are making deliveries. This section can also include the mileage reimbursement policy and procedures following an accident
  • Prohibition of harassment/discrimination
  • Use of corporate credit cards (if any employees have access to them)
  • Cash management and financial policies to cover access to cash, how it is handled and whether a manager or supervisor has to sign off at the end of a shift
  • Computer access and social media guidelines
  • Building access who can get into the building and when; no copying of keys allowed
  • Inventory management

If you have more than one location, you cannot police behavior all the time by yourself. That manager who seems really great when you're in the store could exhibit less-than-exemplary behavior in your absence. Employment practices liability insurance may cover losses arising out of employee disputes where harassment, discrimination or retaliation may be involved. While employee handbooks are important, they don't eliminate your exposure to employment practices liability problems. Business liability policies generally have a standard exclusion for employment practices liability exposures, or may offer only limited coverage. Be sure any policy you consider is adequate to meet the needs of your retail operation, and includes adequate coverage for employment practices liability.

As the boss, it's also your responsibility to provide your employees with safe work conditions and proper training. Even small retail spaces tend to have a storage space or storage room, so retailers should be sure to train employees on practices such as proper lifting and ladder safety. Slips, trips and falls are a concern not only for your customers, but for your employees. The retail trade is particularly affected by workplace injuries, with 123,770 incidents that required employee time away from work in 2015, according to the U.S. Bureau of Labor Statistics.1

When employees are injured on the job, workers' compensation insurance offers coverage for medical expenses and wage replacement. Laws requiring workers' compensation insurance exist in almost every state, though they can vary in requirements. Going without workers' compensation coverage could result in penalties and fines.

Retailers may benefit from working with insurance companies that offer alternate workers' compensation pay arrangements. Typically insurance companies require businesses to pay a larger portion of the workers' compensation premium upfront. If the retailer hires additional sales associates over the course of the year, the insurance premium may increase to cover those additional employees, meaning the owner will owe additional premium at renewal. Some insurance companies offer workers' compensation in a pay-as-you-go arrangement, eliminating the requirement for a down payment and allowing employers to pay for the insurance as they pay their employees. This can be essential for retail, which is more cyclical in nature, tending to boost staffing during busy seasons, and reducing it during lighter times. Under a pay-as-you-go scenario, if a retailer paid accurately throughout the year, the guesswork and surprise premium increase should be eliminated.

In today's competitive retail environment, the right procedures and policies can help position your retail team to do its best work. Don't let negative employee issues pull your focus away from your customers. Be sure to work with knowledgeable, experienced insurance companies that can help you manage these existing risks and select the right coverages to protect your store.  

1 U.S. Department of Labor, Bureau of Labor Statistics, "Nonfatal Occupational Injuries and Illnesses Requiring Days away from Work, 2015," Nov. 10, 2016. 

The purpose of this article is to provide information, rather than advice or opinion. It is accurate to the best of the author's nowledge as of the date of the article. Accordingly, this article should not be viewed as a substitute for the guidance and recommendations of a retained professional. Any references to non-CNA websites are provided solely for convenience, and CNA disclaims any responsibility with respect to such websites.
To the extent this article contains any examples, please note that they are for illustrative purposes only and any similarity to actual individuals, entities, places or situations is unintentional and purely coincidental. In addition, any examples are not intended to establish any standards of care, to serve as legal advice appropriate for any particular factual situations, or to provide an acknowledgement that any given factual situation is covered under any CNA insurance policy. Please remember that only the relevant insurance policy can provide the actual terms, coverages, amounts, conditions and exclusions for an insured. All CNA products and services may not be available in all states and may be subject to change without notice.
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One or more of the CNA companies provide the products and/or services described. The information is intended to present a general overview for illustrative purposes only. Read CNA’s General Disclaimer.
One or more of the CNA companies provide the products and/or services described. The information is intended to present a general overview for illustrative purposes only. Read CNA’s General Disclaimer.
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