It should target a grid intersection to match other grenades. I would suggest only two edges of cover.
A 1 min duration is probably fine, but if you want it to be cheap and affordable, deployable cover is maybe a little too good. I would suggest something like 'is destroyed after a number of attacks have missed you equal to 1/2 item level, minimum 1'.
Higher level versions should maybe do different things. A low level shield shouldn't block movement, a high level shield should, etc.
Clearly, it's too strong that way. As soon as your players will reach the level of the grenade, they'll be able to buy a bunch of them and be easily immune to range attacks.
I like Garretmander idea of having different version with different levels, to avoid your players to stack a bunch of them. I would state that a Shield Grenade only blocks attacks coming from a weapon/creature of a level/CR equal or lower to the level of the grenade.
I like it. Though if people are too squeamish about cover bonuses (I can't imagine why, people are already always in cover, this just allows for more tactical movement during combat and that can't be a bad thing), just make it a force field wall, give it like 3 - 5 hit points per level.