Company insurance is intended to safeguard the financial assets of a business owner and is a vital investment for a coffee shop.
This article will discuss the primary insurance coverage for coffee shops, general liability insurance, as well as additional policies that are appropriate for this industry.
Coffee Shop General Liability Insurance
Every firm, regardless of sector, has risks that should be insured. General liability insurance is the most frequent and comprehensive form of coverage that company owners purchase.
General liability insurance covers the following risks:
Physical harm
Damage to property
Medical expenses
Legal defence and decision
Personal and commercial harm
While general liability insurance is not legally needed for companies, operating without it is exceedingly dangerous. If your company is sued, you might face costs in the hundreds of thousands of dollars (or more). The only way to avoid this sort of catastrophe from destroying your organisation is to have an adequate general liability insurance coverage in place to assist pay for these losses.
COMMON SITUATIONS THAT A COFFEE SHOP’S GENERAL LIABILITY INSURANCE MAY COVER
Example 1: A buddy is visiting your new coffee shop when she trips over some uneven tile and collides with your display shelves, which fall on top of her head. She has sustained significant injuries and needed emergency medical treatment. Her medical expenditures will most likely be covered by your general liability coverage.
Example 2: You’re carrying in some new chairs to the coffee shop when a customer pauses to allow you pass. You slip and lose control of the dolly as you back it into the doorway. The dolly collides with the client, slamming her through the glass door and severely injuring her. She is enraged and demands that you pay for her medical treatment. Her medical bills and any legal fees will most likely be covered by general liability insurance.
Example 3: After interviewing a prospective new barista, you show her around the breakroom, where she slips and falls on the slick floor. There was no warning sign, and she is threatening to sue you for her injuries as well as agony and suffering. Your general liability insurance will cover her medical expenditures, as well as any legal fees and settlement costs.
Of course, this is not an entire list of risks covered by a general liability insurance policy, and certain situations may result in a specific peril not being covered. To minimise coverage gaps, it’s always better to speak with your agent about the terms of your policy.
General Liability Insurance Cost
Coffee businesses in America pay an average of $500 – $1,200 per year for $1 million in general liability insurance.
The cost of your coverage will be determined by a number of variables. Among them are your:
Location
Deductible
Employees’ number
Per-occurrence restriction
The overall aggregate limit
You may be able to get general liability insurance at a lower cost if you buy it as part of a business owner’s policy (BOP) rather than as a separate policy. A business interruption policy (BOP) is a more complete option that covers numerous types of coverage, such as business interruption and property insurance.
Other Types of Coverage Required by Coffee Shops
While general liability insurance is the most crucial, there are various different types of coverage to be aware of. Other forms of insurance that all coffee businesses should have are as follows:
Insurance for Workers’ Compensation
Most states mandate workers’ compensation coverage for any firm that employs part-time or full-time employees. If your workers are injured on the job, their medical expenditures will be covered under this policy. If they are unable to return to work, they may be eligible for disability payments as well.
Insurance for Commercial Property
If your commercial property is destroyed in an accident, it may be financially hard to rebuild everything on your own. Commercial property insurance will try to repair or replace your equipment, supplies, and owned real estate as quickly as possible so that you can go back to business without having to pay out of cash.
Coverage Options for Some Coffee Shops
In addition to the insurance listed above, your coffee shop may need other forms of coverage based on particular features of your business. Some of them may not apply to you, so be sure to ask your agent whether policies are appropriate for your company.
Insurance for Product Liability
While your company works hard to provide high-quality items to your consumers, there is always the possibility that one of your products caused them to get sick or harmed. With product liability coverage, you can be certain that your legal defence and any settlement arising from a lawsuit brought against you will be covered.
Insurance for Data Breach
Offering a customer loyalty programme is a terrific way to reward your loyal customers for returning time and time again. When customers join up for the programme, they usually provide you sensitive personal information that hackers may use. In the case of a cyber attack and subsequent litigation, data breach insurance may secure your company and provide an extra layer of financial protection.
Additional Security Measures for Your Company
Although investing in company insurance is simple (and necessary), it should not be your first line of defence. Yes, insurance will reimburse your company for cash losses incurred as a result of an occurrence, but it is much preferable to avoid losses altogether.
With this in mind, here are a few steps you can take to better secure your company:
Make use of legally binding contracts and other business agreements. (We provide free templates for several of the most often used legal forms.)
To safeguard your personal assets, form a limited liability company (LLC) or a corporation. (To discover how to incorporate an LLC or company in your state, see our step-by-step tutorials.)
Keep your company licences up to date.
Streamline the internal procedures of your company. This will eliminate unneeded variables from routine activities and establish a secure, consistent environment in which to do business.
If your company is an LLC, you should check into LLC insurance.