Retail

For decades, ICA has serviced hundreds of retailers, which have global and local operations. Retailers have relied on ICA to advise them about cutting-edge risk transfer strategies aimed at limiting retailers’ overall cost of risk, with a focus on their needs to protect their margins. This is especially true in the supermarket business, where margins are no more than a quarter of a cent on some products sold. For many large retailers, the complexity of their risks include not only their retail operation but also their warehouse and distribution centers, their trucking fleet, which can exceed the size of many independent mid-size trucking firms, and all the other logistics that are tangential to these risks.

In a global economy where information is immediately available to consumers, it has become more important for retailers to protect their brand from damaging information that may impune their reputation. Any news from abroad that links a retailer to the abuse of child or animal labor, can almost immediately affect the stock price of these retailers, unless the company can refute these allegations. The challenge of COVID-19 has recently affected the retail industry in ways that they never thought imaginable, leading to store closures and major retailers going out of business. For those that have previously developed sophisticated online shopping platforms, these retailers have not only survived this economic downturn, but in some cases have been advantaged as a result of these investments. Some retailers offering advisory services to customers have an increased exposure that may go beyond product liability. While others that have invested in customers’ participation in experiential and interactive in-store marketing have been sidelined by the absence of foot traffic. Whether opening or closing locations, or evaluating their supply-chain risks and exposures created by their vendors, retailers today must take a proactive approach to the new perils mentioned above in order to remain in business. 

In this regard, ICA’s Risk Management Program Marketing service offers tailored insurance specifications for the marketing and purchase by the retailer of all insurance coverages required by retailers as well as specifications for the claims handling procedures and guidelines of TPAs servicing the retailer or the in-house claims department of the retailer. Furthermore, ICA’s Certificate of Insurance Program Management services are of utmost importance to retailers who may have thousands of vendors that require the retailer to monitor the insurance afforded by these vendors in order to properly pass the risk back to their companies. 

Another risk facing retailers is making sure they are adequately covered for potential interruption of their business due to catastrophic exposures such as loss from floods, hurricanes and earthquakes, especially when the retailer has multiple locations in an area subject to catastrophe exposures. In this regard, retail clients also seek ICA’s input for implementing well-designed plans that address the availability of necessary resources to them prior to facing a loss. Therefore, contractors, remediation services and those providing building material for boarding or reconstruction, should be committed to the retailer in advance, so these resources are available when required. This would allow a retailer to reopen its doors as soon as possible following a loss and to help prevent its customers from shopping elsewhere while in repair. See ICA’s Disaster Planning and Business Continuity Support service. Additionally, to simplify the claim resolution process, consideration should be given to the valuation of inventory at retail selling price to avoid the complications associated with business interruption negotiations.

ICA understands that businesses in the retail sector can vary dramatically from one another, which pose unique types of risks to each retailer. One area of risk that is undoubtedly commonplace to all retailers is that of cyber liability. Retailers are the number two industry after the financial industry that experience cyber attacks, including ransomware and other related intrusions. Consideration should be given to develop risk management programs and their related services that meet the retailers’ approach to risk exposures. And therefore, the risk management departments of retailers utilize ICA’s Outsourced Risk Management Placement service (see Off-premises Support Service) to augment their own department’s need for additional services offered by ICA.

The below client testimonials illustrate ICA’s value provided to its retail industry clients:

“We have been with ICA for twenty years… We rely on ICA’s advice with respect to the placement of insurance policies and the transfer of risk to third party service providers… ICA has been instrumental in guiding us through both soft and hard insurance markets. We are appreciative of our longstanding relationship with ICA and look forward to working with them in the years to come.” – Retail Client

“… Eight years of professional excellence, commitment and integrity that I have rarely seen in other professionals… the very first meeting we had with the broker with you present, showed me what a vacuum we had been in, not only in terms of how over-priced our insurance program was, but also how lucky [Client] had been till then not to have had one of the many uncovered losses which you pointed out could have happened for which we did not have coverage… I realized that… insurance did not mean much unless we had someone who solely looked after our interests – and that someone was ICA.” – Retail Client

Contact ICA for a comprehensive list of client references.