Description of operations: Convenience stores offer to individuals the quick pickup of perishable consumables such as milk and bread, as well as immediate needs such as aspirin or tobacco. Other items commonly available are: newspapers, snacks, nonprescription drugs, novelty items, and some canned or packaged foods.

Other services may include gasoline, diesel fuel, kerosene, car washes, fuel oils, and, where permitted, beer and wine. In states where allowed, lottery tickets are high sales items. Still others may offer deli-type food services, such as sandwiches and beverages to go. The products provided can be fresh, canned or frozen.

Convenience stores can conceivably carry any consumer product. Sanitary conditions and strict housekeeping standards are crucial. Operations may be plagued by insects and rodents if standards are not set and maintained and if disposal of food waste is not properly handled.

Property exposure exists from many ignition sources. If there is cooking on premises, the cooking and heating equipment may overload. Refrigeration equipment may overheat. Wiring from all of the various units may become frayed. The wiring must be adequate for the equipment that is in place and up to code. All equipment, especially refrigeration units, should be well maintained and in good condition. Smoking can also be a serious problem. If there are gasoline sales, there is the additional exposure to the fumes and potential for explosion. All food items, canned and uncanned, are highly susceptible to damage by fire, heat, smoke and water, which could result in total destruction of stock if any fire occurs due to contamination from smoke and firefighting materials.

Power outages of even moderate duration can render all fresh and frozen goods unfit for consumption or sale. Alarms and warning devices should be in place to alert the operation to loss of power. Backup power, such as a generator, should be available. Theft is also a concern. Appropriate security measures should be in place, such as keeping more expensive items behind the counter and inaccessible to customers, and having security mirrors prominently displayed throughout the store. Premises alarms should report to a central stations or police department after hours.

Crime exposure is extreme for both employee dishonesty and theft of money and securities. The 24-hour or even late night/early morning hours, plus attractive locations close to major thoroughfares and interstates, make convenience stores a target for holdup. A bulletproof cashier’s cage may be necessary in high-crime areas. Employee dishonesty is controlled through background screening of employees, inventory monitoring, control of the cash register, disciplined controls and division of duties. To prevent theft of money and securities, money should be regularly stripped from the cash drawers and irregular drops made to the bank during the day if there is substantial accumulation.

Inland marine exposures normally include signs, valuable papers and records for suppliers, and possibly computers. Accounts receivable is an exposure when customers are allowed to buy on credit.

Premises liability exposure comes from slips and falls due to public access to the premises. Floor covering must be in good condition, with no frayed or worn spots on carpet and no cracks or holes in flooring. Steps and uneven floor surfaces should be prominently marked. During inclement weather, snow, mud, and water will be continually tracked into the facility because of the high traffic exposure. There should be monitoring of the entrances and self-serve areas for outside influences, spills and breaks that can lead to slips and falls.

Sufficient exits must exist and be well marked, with backup lighting systems in case of power failure. Parking lots and sidewalks need to be in good repair, with snow and ice removed, and generally level and free of exposure to slip and falls. Security of visitors in parking areas is rapidly becoming the responsibility of the owner or operator of the premises. Outdoor security and lighting must be consistent with the area.

Products liability exposure results from food poisoning, contamination and allergic reactions. Monitoring the quality of food received, posting lists of ingredients, and maintaining proper storage temperature can reduce this exposure. It may also come from the manufacturer, so accurate records must be kept of products and batches to monitor for recalls. There should be controls in place to prevent all types of contamination from chemicals such as insecticides and pesticides used for pest control. Stock should be regularly rotated so older, but not out of date, stock is sold first, and out of date stock is removed and discarded.

Liquor liability exposures are mostly from selling liquor to underage individuals and those already intoxicated. Carding is required to control the situation, and consumption of alcoholic beverages on premises should be prohibited. Employees must be trained to recognize signs of intoxication.

Automobile liability exposure generally is limited to hired or nonownership liability exposures from employees using their vehicles to perform errands.

Workers compensation exposures come from lifting that can cause back injury, hernias, sprain, strains, slips and falls. Employees should be provided with safety equipment, trained on proper handling techniques, and have conveying devices available to assist with heavy lifting. Injury or death during holdup is a major cause of loss. Employees should be trained to respond in a prescribed manner. Other workers compensation concerns may result from unskilled labor, high turnover, and language problems. Workers must also be able to deal with unruly customers who are refused the purchase they desire.

Refrigerant leaks can be a potential cause of injury. The injury potential is determined by the type of refrigerant used and the reason for the leak.

Minimum recommended coverage:

Business Personal Property, Business Income, Equipment Breakdown, Employee Dishonesty, Money and Securities, Signs, General Liability, Employee Benefits, Liquor Liability, Umbrella, Hired and Nonownership Auto, Workers Compensation

Other coverages to consider:

Building, Leasehold Interest, Real Property Legal Liability, Accounts Receivable, Computers, Valuable Papers and Records, Forgery, Computer Fraud, Employment Related Practices, Business Auto Liability and Physical Damage

Reprinted copyrighted material with permission by the Rough Notes Company, Inc.