Coffee Shop Insurance
Whatever the style or flavor of your coffee shop, it needs the right protection against losses due to theft, lawsuits, and more.
Written by
Christine Lacagnina has written thousands of insurance-based articles for TrustedChoice.com by authoring consumable, understandable content.
Reviewed by
Jeff Green has held a variety of sales and management roles at life insurance companies, Wall street firms, and distribution organizations over his 40-year career. He was previously Finra 7,24,66 registered and held life insurance licenses in multiple states. He is a graduate of Stony Brook University.
Like all business owners, coffee shop owners need a trusted advisor who can help them find the best insurance coverage to protect their livelihood from potential costly problems that can arise. Whether it's dangers to the general public or your employees or unforeseen events like fires, storms, and theft, you need the right combination of business insurance coverage that addresses the exposures in your specific industry.
Having the right coffee shop business insurance coverage is one of the keys to maintaining smooth operations. All businesses come with risks, so you’ll need to obtain protection during your preparation phase. An independent insurance agent will get to know you and your business. They can work with multiple reputable companies that specialize in coffee shop insurance. But first, let's talk a bit more about insurance for coffee shops.
Why Do I Need Coffee Shop Insurance?
If you own and operate a coffee shop, you’ve probably spent a great deal of time and money setting up your business. You’ve had to hire employees, rent or buy equipment, purchase furnishings and décor, procure your products, and perfect your recipes. Yet much of what can go wrong is entirely out of your control. At any time, your hard work could be jeopardized if you don’t have the right insurance coverage.
Whether you own a stand-alone coffee shop or operate a mobile cart or kiosk, you need coffee shop insurance to protect your investment when the unexpected happens. All coffee shops tend to be fast-paced environments, and many disasters can't be predicted, from financial woes to employee injuries, accidents, and lawsuits. Whatever the size or type of coffee shop you run, it needs coffee shop insurance.
A few possible loss scenarios that can be addressed with insurance for cafés include:
- A customer or supplier slips and falls in your shop
- Guests in your shop damage furniture, bathrooms, display cases, or equipment
- Food, beverage, or ingredients are contaminated or spoiled
- Breakdowns of espresso machines, coffee makers, toasters, ovens, or other baking equipment
- Fire, extreme weather, or a natural disaster
- Theft or vandalism by customers or employees
An independent insurance agent can further explain the importance of coffee shop insurance to you.
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Who Sells Coffee Shop Insurance?
Many insurance companies sell coffee shop insurance, but a lot of them don’t advertise it by name. Most insurance companies that sell small business insurance can create a customized insurance package for you based on the needs of your coffee shop, while a few others already offer a package titled coffee shop insurance.
Still, the best way to find the right coffee shop insurance company for your needs is to work with an independent insurance agent. These agents are experienced in helping customers of all kinds, including coffee shop owners, so they know which companies to recommend. They’ll be able to offer informed suggestions based on company reliability, rates, and more.
| Best Coffee Shop Insurance Companies | Overall Company Ratings |
| The Hartford |
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| Progressive |
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| Nationwide |
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| Acuity |
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While many insurance companies could create a coffee shop insurance policy for you, finding coverage could also depend on the area you live in. That said, one coffee shop insurance company outshines its competitors:
- Best overall insurance company for coffee shop, cafe, and coffee house insurance: The Hartford
While the package sold by The Hartford is titled restaurant insurance, its coverage is designed to meet the needs of many food industries, including coffee shops, cafés, and coffee houses. The Hartford starts its coffee shop insurance package with a business owners policy (BOP) and then offers add-on coverages to complete the order needed for your business. A BOP includes the basic commercial general liability protection, commercial property coverage, and business income coverage needed by coffee shops.
The Hartford also offers the following add-on coverages to their coffee shop insurance:
The Hartford has been in the insurance industry since 1810 and has been rated "A+" by AM Best. In addition to its impressive credentials and coverage options, customers report a high level of satisfaction in interacting with the company, including when filing claims. All these elements combined led to The Hartford winning the title of our top pick for coffee shop insurance.
What Does Coffee Shop Insurance Cover?
Every coffee shop needs a customized package of property, liability, automobile, crime, and other business insurance policies to protect them from financial losses. Talk to your independent insurance agent about the specifics of your coffee shop to analyze your need for the following types of coffee shop insurance.
Property Coverage for Coffee Shops
Coffee shops need business property coverage for:
- Buildings and their contents
- Inventory and stock
- Business interruptions
Your commercial property insurance offers protection for your building and the contents inside it. If you sustain a property loss after a fire, a tornado, lightning, theft, vandalism, or some other covered event, this policy helps you pay to rebuild, make repairs, and replace destroyed or damaged furniture, kitchen equipment, inventory, stock like coffee cups and cutlery, and even outdoor tables, umbrellas, and lighting.
When you have a property loss, you might also have to close down for a while to make repairs and restock your coffee shop. In these cases, your business interruption insurance helps replace lost income during the shutdown period. It also covers some of your ongoing expenses like rent, employee salaries, utility bills, and more.
Talk to your independent insurance agent about your need for equipment breakdown coverage. It protects against costs associated with the sudden and accidental breakdown of machinery and equipment. It pays to repair or replace the equipment, as well as any business interruption costs that accompany it.
Liability Insurance for Coffee Shops
Liability insurance protects your business when you've been blamed for causing harm to an individual or another business. It's your financial lifeline if you get sued by a third party.
Commercial general liability (CGL) insurance provides broad protection for third-party bodily injury and property damage claims. If a guest gets burned by coffee that's too hot or spoiled milk in a hot cappuccino drink causes an illness, your general liability policy pays for direct costs (i.e., medical bills, etc.) as well as attorney fees, court costs, settlements, and judgments if you get sued. CGL insurance also provides coverage for advertising liability, slander, and libel claims against your coffee shop.
Get Protection for When Food Goes Bad
Coffee shops need special coverage for product losses due to contamination or spoilage. Contamination and spoilage coverage pays for certain losses if coffee, milk, or other ingredients get spoiled or contaminated due to refrigeration breakdown, utility interruption, or other foreign substance contamination.
If your local board of health or another agency forces you to close because of food contamination, your contamination and spoilage insurance may cover you for lost income during the shutdown period as well as costs related to cleaning contaminated equipment and disposing of and replacing spoiled food.
What Are the Biggest Costs of Running a Coffee Shop?
Coffee shop owners not only have to pay for the insurance they need, but their business also comes with many costs. Here are some of the most common:
- Labor
- Food and supplies
- Admin fees
- Leases and utilities
- Employee wages
With the right coffee shop insurance policy, you can anticipate risks that would prevent your business from being able to pay any of these costs in case of a disaster like a fire or a break-in.
Other Coffee Shop Insurance Coverage to Consider
Aside from major property and liability risks, coffee shop owners are likely to need several other insurance policies to protect them from financial harm and unexpected events. Talk to your independent insurance agent about your potential need for the following:
- Commercial auto insurance: Protects vehicles owned by your coffee shop. In addition, if employees drive personal vehicles for business use, like picking up at bakeries or making occasional deliveries, you need hired and non-owned auto liability insurance.
- Crime coverage: Protects your coffee shop if an employee or a group of employees engage in theft, forgery, or fraud that damages your business. It also offers coverage in cases of shoplifting and vandalism.
- Workers’ compensation insurance: Required for any business that has employees, it protects your workers from the costs of job-related injuries and illnesses. This coverage pays for medical bills and lost wages for employees who sustain cuts, burns, slip-and-fall injuries, repetitive motion injuries, or any other injuries or illnesses related to their work.
- Cyber liability insurance: Protects your coffee shop if it's the victim of a cyber breach. If your computer network or website gets hacked and confidential customer or vendor information is exposed, the damage to your reputation and bottom line can be insurmountable.
- Employment practices liability coverage: Protects you if a current or former employee sues you for discriminatory employment practices, harassment, etc.
- Product liability insurance: Protects your business against lawsuits related to its products (like drinks) causing harm or property damage to customers or other third parties.
An independent insurance agent can help you complete your coffee shop insurance package with all the coverages you need most.
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Our independent agents shop around to find you the best coverage.
Finding Discounts and Savings on Coffee Shop Insurance
So, how much does insurance for a coffee shop cost? While coffee shop insurance isn’t necessarily cheap, fortunately, many insurance companies offer a handful of competitive discounts and other ways to save money on coverage. How much coffee shop insurance is can vary due to many different factors for each specific business, but an independent insurance agent is especially skilled in finding money-saving hacks.
The discounts available vary greatly depending on which insurance company you go through, but here are a few examples of common discounts offered on coffee shop insurance policies.
- New or updated construction discount: Your commercial property insurance coverage could receive a premium discount if your coffee shop's building was recently built or updated.
- Safe premises discount: You could receive a discount on the liability portion of your coverage if your coffee shop provides especially safe premises to prevent customer injury.
- Annual premium discount: You could qualify for a discount on your coffee shop insurance if you opt to pay your premiums annually in one lump sum rather than monthly installments.
- Security systems discount: Your coffee shop might qualify for discounted property coverage if your building is equipped with security measures like burglar alarms or cameras.
- Formal safety plan discount: Your workers’ comp. coverage could be discounted if your coffee shop provides a formal safety plan to help avoid employee injury, sickness, and death.
- Insurance package discount: You’re likely to save quite a bit on your coffee shop insurance if you shop for a special packaged product with all the protections you need rather than purchasing each required type of coverage separately.
An independent insurance agent can not only help you find all the coverage your coffee shop needs to help maintain smooth operations but also find the most affordable rates by browsing a number of different insurance companies’ coffee shop insurance products. They'll look out for any discounts available to help reduce your coffee shop insurance costs.
Comparing Coffee Shop Insurance Policies
When shopping for coffee shop insurance, it's handy to work with an independent insurance agent. Beyond that, you'll want to look for certain types of coverage in the policy to ensure that you're getting the best bang for your buck and the best picture of protection for your business.
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Mishaps and Scenarios to Think about for Coffee Shop Insurance
When getting set up with coffee shop insurance, it’s a good idea to think about some common mishaps that could affect your business in order to prepare for them in advance. Here are just a few common mishaps and scenarios to consider when looking into purchasing coffee shop insurance:
- Your business gets damaged or destroyed by a natural disaster: If a destructive natural disaster rolls through your town and hits your coffee shop, you’ll need to make sure your commercial property insurance is adequate. While business property insurance covers many natural disasters, it typically doesn’t cover flood damage or earthquakes. You’d need a separate policy to prepare for either of those disasters, and an independent insurance agent can help you find the right coverage through flood insurance or earthquake insurance.
- A customer gets sick after consuming your products and sues you: Whether your coffee shop is found to be responsible for a food poisoning claim or not, you’ll need to have enough liability coverage to protect yourself either way.
- One of your employees gets into an accident with the company vehicle: If your coffee shop uses company vehicles, it’s important to get commercial auto insurance to protect them while they’re out on the road or parked in the lot. A regular auto insurance policy will not cover vehicles used for business purposes.
- One of your employees gets injured, ill, or dies on the job: Sadly, employee injuries, illnesses, and deaths are some of the biggest threats businesses of all kinds face. That’s why it’s ideal to ensure you have enough protection for your employees under a workers’ compensation policy.
An independent insurance agent can list several more examples of common mishaps and scenarios to consider while browsing through your available coffee shop insurance options. They’ll help your business anticipate and prepare for the worst by selecting the best available coverage for your needs.
Frequently Asked Questions about Coffee Shop Insurance
The actual package of coffee shop insurance may not be legally required to run your business, but you must carry coverages such as commercial general liability insurance to protect yourself. In the food industry, it's especially important to have liability protection in case one of your customers gets sick.
Certain mortgage lenders will also require you to carry commercial property insurance on your coffee shop's building before you can open for business. So, while a coffee shop insurance package itself is unlikely to be mandatory, the important coverages it provides often are.
To answer that, you'll have to address the needs of your specific business. It's a great idea to review your coffee shop's setup and operations with an independent insurance agent to help ensure that you get matched to a policy that covers all of your business's risk areas.
For coffee shops with an online ordering option, having the right cyber liability coverage is even more important to protect your business in case a customer's credit card or personal info gets stolen during or after the transaction.
As for curbside pickup, dine-in areas, and drive-thrus, the standard coverages provided in coffee shop insurance, like general liability, should be enough to protect you.
So, how much is insurance for a coffee shop? Truthfully, it depends on quite a few factors. A fairly busy café in a mid-size city might pay a couple thousand dollars annually in combined liability insurance, workers’ comp, and more. However, a large coffeehouse in NYC that has a huge clientele will probably pay much more than that.
On average, coffee shops and cafes in the U.S. pay about $545 per year for just the general liability insurance for their business. Purchasing coffee shop insurance as a packaged product can help save you money on getting several critical coverages together.
Why Work with an Independent Insurance Agent?
Independent insurance agents simplify the process by shopping and comparing insurance quotes for you. They work for you and not just one insurance provider. That gives them the freedom to provide you with only the options for coffee shop insurance that offer the best blend of coverage and cost.
https://www.insureon.com/food-business-insurance/coffee-shops-cafes/cost