Coffee Shop Insurance: What Do You Need?
Owning and running a coffee shop can be hectic. Between the morning rushes, complex orders, and keeping your café staffed, you may put off figuring out the details of your insurance program.
Luckily, coffee shops only need a couple of coverages to cover the vast majority of their liabilities as a business.
Please note that if you are a large company and not just a small, local coffee shop, you might need some policies in addition to the below coverages. Your insurance program might also need to be structured differently—for example, you might need to purchase employment practices liability on a dedicated policy instead of on the general liability policy. Give us a call if you need a more customized insurance solution.
Coverages Coffee Shops Need
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General Liability Insurance
The first policy that every coffee shop should have is the commercial general liability insurance policy. This covers property damage and bodily injury that happens to others interacting with your business, like customers.
For example, if a customer slips and falls on your premises, or if an employee spills hot coffee on someone, the commercial general liability policy would cover you.The policy also covers incidents such as your coffee shop causing food poisoning to a customer.
In addition, commercial general liability insurance covers most of the liability arising from doing business with the public and having customers consuming your products.
If you are a local coffee shop, we highly recommend adding some additional coverages to your general liability policy; as a small shop, you should be able to do this. Larger companies, however, might have to purchase these coverages separately.
Include Cyber Coverage
If your business relies on any computer systems, it is very important to have some sort of cyber coverage to cover incidents of data breaches, ransomware, or various cyberattacks.
Adding this coverage to your general liability is usually inexpensive and can provide basic protections against these kinds of threats.
Include Employment Practices Liability Coverage
Having employees can be a substantial liability for your business, especially in the food service industry. Every time an employee is hired or fired, you face the risk of a discrimination or harassment lawsuit—whether you are innocent or not.
Additionally, if you accidentally break any state employment regulations regarding payroll or procedures, you could be subject to an investigation and a large fine (on top of a lawsuit).
This is the reason employment practices insurance exists—to cover employee-related claims or allegations of harassment, discrimination, retaliation, or even issues with various local or federal employment laws.
To get the most comprehensive coverage, you can purchase this kind of insurance on a separate policy. However, you can also add it on to your general liability policy if you want basic coverage for a lower cost.
Business Property Insurance
Your coffee shop might represent an investment of hundreds of thousands of dollars—just think of the espresso machines, kitchen supplies, decorations, furniture, and everything else it contains.
Business property insurance can cover your building if you own it. The insurance will also cover the contents that your business owns—the coffeemakers, supplies, and so on—that are located inside the building.
Ultimately, your arrangement will depend on whether you own or rent the building or space. Your policy can be customized to your needs.
This policy will cover your property from perils such as fires, tornadoes, hurricanes, theft, vandalism, and much more.
Workers Compensation
If you have employees, chances are that you will be required by law to purchase workers compensation insurance to cover the medical bills employees accrue because of a workplace injury.
If an employee gets hurt on the job, it is almost always your responsibility to pay for their medical bills and their wages while they cannot work. It does not matter if the employee had some part in causing the accident or if they didn't use proper safety procedures; most laws dictate that it is exclusively your responsibility to remedy the situation.
A workers compensation policy transfers that liability from you onto an insurance company to cover the injuries that happen to employees, no matter how large the injury and no matter how long it takes the employee to recover fully.
How To Get Better Rates On Your Coffee Shop Insurance
If you cook food, have fire protection in place.
Probably the #1 thing you can do to get a good insurance policy at a good price is to have adequate fire protection for the building if you do any cooking. The best way to do this is to situate your shop in a building with a sprinkler system, but you should always go above and beyond to prevent fires. This prevention can include implementing ANSUL systems and fire extinguishers.
Fire losses continue to be one of the largest claims that regularly impact restaurants (and coffee shops with cooking operations). Having reasonable fire protections will make you more desirable to an insurance company.
Educate and train employees on job safety.
Make sure all your employees are properly trained on their job duties. We regularly suggest that employees be trained on how to lift heavy items. They should also learn all the safety protocols for working on various pieces of kitchen equipment. On top of that, they should wear proper shoes for the job.
Most employee injuries can be prevented with safety training and fostering a culture that encourages safety.
Have premises liability risk prevention procedures in place.
Although sometimes unavoidable, many premises liability claims can be avoided through proper maintenance procedures and employee training.
We recommend having systems in place that lower the risks of your customers getting hurt. These systems include adequate slippery floor signage, proper maintenance of the store and parking lot, training your employees on how to safely carry hot food to avoid spilling it on a customer, and installing proper non-slip mats near the doors and areas that commonly get slippery.
Real Coffee Shop Quote Examples
| Location | Revenue | # of Employees | Insured Property Amount | Quoted Insurance Company | BOP Annual Premium | Workers Comp Annual Premium |
|---|---|---|---|---|---|---|
| Dallas, TX | $1,500,000 | 8 | $100,000 | Travelers | $4,546 | -- |
| Whitefish, MT | $850,000 | 6 | $75,000 | Travelers | $2,182 | $2,192 |
| Tulsa, OK | $400,000 | 4 | $50,000 | Travelers | $2,423 | $1,352 |
Summary
Purchasing coffee shop insurance can be easy if you know what you are looking for. For a quick coffee shop quote, you can get an instant rate online through our website, or if you are looking for advice from an expert, you can give us a call anytime.
About The Author: Austin Landes, CIC
Austin is an experienced Commercial Risk Advisor specializing in property & casualty risk management for religious institutions, real estate, construction, and manufacturing.