Are you truly prepared for the unexpected?

Independent grocers know better than most that the unexpected can quickly disrupt business—from a refrigeration breakdown that spoils thousands of dollars’ worth of inventory to a flood that forces the store to close its doors. 

A new TD Insurance survey shows that while nearly all Canadian small business owners carry insurance (94%), more than half (52%) said they would still rely first on financing, such as credit cards or loans, in an emergency. 

For grocery retailers, 56% indicated they would reach for credit cards and 27% would rely on family and friends. With grocers already facing tight margins and rising costs, that gap between coverage and confidence could make recovery harder than it needs to be.

So why does that gap exist?

“What stood out in the survey was that grocery and convenience retailers were among the least confident that insurance would help them in a crisis,” said Tang Trang, vice-president, product and pricing, small business insurance at TD Insurance. “I think there are several misconceptions, and one is if you use your insurance, maybe my premium will go up, maybe you won’t be able to get it next year (which is untrue). So, there is a lot of fear.”

Another issue, Trang said, is that retailers sometimes buy insufficient insurance or even the wrong kind for their situation. And in some cases, they think they have the wrong kind of insurance; that it won’t cover their particular situation or that it won’t cover smaller issues. Trang compares it to buying a tablet and using it only for writing or scrolling. “It has a thousand features and you use only 1% of it.”

Issues that grocery retailers may face and need insurance for include a sudden breakdown of freezers or fridges, power outages that force closure, vandalism, theft, fire, floods, water damage, burst pipes, customer slip and fall, high-wind damage, etc. Insurance should generally cover these situations (though every retailer will have different needs) and should be used to avoid business interruption as much as possible.

"It’s important to access an expert and talk about the collection of coverage that is available," he said. It’s also important to explain your business and your business goals in detail so that, “the right insurance can be tailored to the business needs.”

With 27% of surveyed grocers saying managing cash flow and finances was their biggest business challenge, Trang points out that insurance doesn’t just protect against loss—it preserves cash flow and provides critical liquidity in times of crisis when small business owners need it.

Trang gives the real-life example of an independent specialty food store that had a power outage that resulted in a freezer shutout and spoiled meat. Within 30 days, insurance was able to replace the inventory, ensure the freezer was functioning and offer advice on getting a generator.

Trang recommends retailers maintain accurate inventory records and promptly and carefully document any incidents. If there is a loss, this will help expedite insurance claims and get business owners back on their feet quickly.

He also recommends that retailers don’t think of insurance as “one and done.”

“Every business changes over time, and you may be wanting to grow your business, so you may need more insurance or a different type of insurance,” he said. 

By meeting with an advisor to understand their coverage and plan for both everyday risks and major disruptions, he added, grocers can reduce reliance on costly emergency financing and focus on what matters most: keeping shelves stocked and customers satisfied.