Assurance for the Retail and Shopping Mall Industry
The retail sector has long been one of the most established and dynamic pillars of the economy, built upon the exchange of goods and services throughout history. Evolving continuously in line with technological advancements and shifting consumer habits, it spans a wide spectrum—from ready-to-wear apparel to food retailing, from shopping malls to digital platforms.
In Türkiye, with a turnover exceeding TRY 1.4 trillion, an annual growth rate of 17%, and a workforce of 2.5 million people, the sector remains a significant driving force of the economy.
At NART Insurance and Reinsurance Brokerage, we closely monitor the risks within this large and rapidly developing industry, providing tailored insurance solutions to leading institutions in the sector, and ensuring sustainable protection.
Inflation and sudden exchange rate fluctuations
Volatility in consumers’ disposable income and purchasing power
Deterioration of the sector’s financial structure and reduced borrowing capacity
Repetitive investments in an already saturated shopping mall landscape
Pricing policies—particularly in the e-commerce segment—that may negatively impact consumer perception during promotional periods, amplified by increased customer access to information
Geopolitical tensions hindering shopping tourism (including regional political or military conflicts and acts of terrorism)
Declining profit margins
The impact of energy costs on overall operating expenses
Rising labor costs driven by COVID-19-related factors
Deceleration of growth in the conventional retail space alongside the expansion of e-commerce
Given its position as a driving force of the Turkish economy, it is imperative to provide a comprehensive perspective on the current state of the modern retail sector, to examine existing and potential risks in detail, and to highlight the necessity of effective risk management systems within this framework.
Key Risks:
Natural disasters and fires
Business interruption
Strikes, lockouts, and terrorism
Machinery breakdown and electronic equipment failures
Storage-related risks
Risks associated with the transportation of products, raw materials, and related goods
Employee liability
Third-party liability
Credit risks
Cyber risks
Environmental risks
As societies reopen to in-person shopping while demand for online retail remains strong, retailers are now exposed to a more complex set of risks than ever before.
With COVID-19 still present on a global scale, businesses must address challenges related to the return of physical shopping experiences—ranging from customer and employee safety to maintaining profitability—while simultaneously managing the growing reliance on e-commerce.
Some online retail–related risks, such as cybersecurity threats, existed prior to the pandemic. However, other challenges—such as supply chain disruptions—have become more pronounced, with shipping and logistics complications, including delays in obtaining products across international borders, posing significant operational difficulties.
Retailers should, at a minimum, maintain general liability coverage to protect against claims of customer injury. In addition, they should consider a business owner’s policy that covers storefronts, commercial buildings, and any personal property located at those premises.
Any retailer with employees other than the owner will generally require some form of workers’ compensation insurance, although specific requirements may vary from country to country. Finally, if your business is engaged in product transportation or delivery activities, it is important to carry commercial auto insurance to safeguard against claims arising from accidents.
When a business operates on a large scale, the potential for substantial profit is accompanied by the risk of significant loss. Wholesalers, in particular, face a unique set of risks as part of their daily operations. Foremost among these is the loss of goods due to theft or catastrophic events. Another critical risk is the inability to secure supply, which can disrupt operations.
Given their role in production or distribution, wholesalers may also become involved in product liability claims. Finally, they may face additional legal actions for various reasons, ranging from undelivered goods to penalties for non-compliance with regulatory requirements.
First and foremost, wholesalers should consider carrying general liability insurance, similar to that used in retail operations. This provides protection for the company against claims of injury or other damages involving customers or the general public. Other policies to consider include workers’ compensation—where required by local regulations—and transportation-related coverage such as commercial auto insurance, if applicable.
If a wholesaler is responsible for international shipments, it is generally advisable to obtain extended cargo loss and liability insurance. This type of coverage protects against damage to goods in transit, including harm caused by the products themselves while in shipping containers or other transportation vehicles.
