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What is stock insurance?

An optional extra with contents insurance, stock insurance covers your business against theft damage and destruction of your stock

If your business relies on having a considerable supply of stock, it pays to protect that stock against an unforeseen disaster so you’re not left out of pocket.

But what is stock insurance? What does it cover? And how much do you need?

Does my business need stock insurance?

No matter how well protected your stock, there’s no guarantee it won’t be stolen damaged or completely destroyed, so it pays have to have a stock insurance policy in place.

What does stock insurance cover?

Stock insurance will cover the cost price of your stock if it is stolen, damaged or destroyed. It will pay out the amount need to replace the stock based on its cost price not its retail price.

What won’t it cover?

In order to ensure you’re covered in the event of a disaster, your stock may need to be stored in a certain way that minimises its risk. Different policies will have different requirements.

Make sure you don’t undervalue or overvalue your stock or you could be out of pocket when it comes to making a claim or have a completely invalid claim. Not all policies will cover goods in transit so make sure yours does.

How much stock insurance will my business need?

Not a standalone insurance policy, stock insurance can be added onto your business contents insurance policy as an optional extra. Stock is liable to change thing so you will need to keep your insurance provider up to date with fluctuations in stock level or stock value.

How can I choose a provider for stock insurance?

Use an insurance comparison site to find the most appropriate and affordable stock insurance. Make sure your policy covers you against any eventuality.

What other insurance does my business need?

By law you’ll need to take out employer’s liability insurance to cover you in case one of your staff gets injured or becomes ill. If you want to ensure your business is fully covered in the event of a disaster you should take out the following:

  • Business contents insurance – covers you for loss or damage to your business equipment or stock
  • Building insurance – protects the bricks and mortar of your business from damage
  • Business interruption insurance – covers your business for the losses suffered during a forced closure
  • Motor Insurance – any business that operates a vehicle needs to be covered, either by individual policies or fleet cover

Bryn Glover
Bryn Glover


As Editor of Startups, Bryn runs content strategy and our annual campaigns. A lover of small business, you can find him writing about exciting entrepreneurs and UK industry trends.