Cafe insurance (also referred to as coffee shop insurance) is one of the best ways to mitigate risk as a cafe business owner.
Much like grocery store insurance, food truck insurance, bakery insurance, and restaurant insurance, this type of business insurance ensures that your business won’t be put in a bad financial situation if something goes wrong.
Throughout this article, we’ll take a look at the various types of policies available to cafe owners, how they vary based on the type of coffee business you run and how they can help your cafe business. We'll also look at the average coffee shop insurance cost!
Liability insurance available for coffee shop businesses are public liability insurance, product liability insurance, and general liability insurance. Let’s discuss these in more detail.
Public liability insurance is one of the most common forms of insurance coverage that businesses acquire. This kind of insurance will protect upon getting sued by customers who were injured or sustained property damage in your coffee shop, ranging from suffering broken bones to simply breaking their phones. Public liability insurance helps by covering the cost of:
Compensation for pain and suffering
Reimbursements for property damaged
Attorney fees and other defense costs
Aside from customers, public liability insurance covers personal injury or property damage claims from other food vendors, visitors, and other entities not part of your business operations. Public liability insurance doesn’t cover other exposures associated with your business’s dealings people. With that said, if you feel that the protection it provides isn’t enough, purchase general liability insurance.
General liability insurance assumes the function of public liability insurance. Perils this policy covers are:
Third-party bodily injuries - A customer, visitor, or vendor experienced an accident within the premises of your business. The injured individual demands you cover his medical expenses and provide compensation for pain and suffering
Third-party property damage - A coffee was spilled on an expensive laptop that might be owned by a vendor, customer, or visitor. Upon knowing what happened, the owner of the laptop demanded you provide reimbursement equal to the cost of the damage item
Defense costs - General liability insurance will pay for attorney fees and other legal costs in case the aggrieved party decides to take legal action
There are optional policies in general liability insurance. General liability insurance, with its optional policies, provides a greater degree of protection against your business. Add-ons to general liability insurance are:
Advertising injury coverage
Rented premises liability coverage
Advertising injury coverage will cover compensation, attorney fees, and other legal costs if a customer files a claim because your coffee shop committed or allegedly committed advertising or reputational harm. Common inclusions in general liability insurance having advertising injury coverage are:
Slander - You unintentionally spoke ill about another cafe while talking to a customer. The other cafe knew this and decided to sue your business and demand compensation
Libel - Your cafe published a blog post reviewing the top cafes in another location. A particular statement in the blog was inaccurate and was harmful to the reputation of a particular cafe mentioned in the blog post. This cafe then decided to file a claim against your business and wanted you to compensate financial losses
False advertising - Your cafe published an ad featuring a new product. Customers tried the new product and discovered that it doesn’t match expectations. One customer filed a claim, accused your business of misleading the masses, and demand you pay for damages incurred
Copyright infringement - You unintentionally copied another business’s signage. The business filed a claim and demanded you pay for the damage done
If you’re just renting a commercial space for your coffee shop, then rented premises liability can help. Rented premises liability coverage will help you reimburse the landlord if fire and other covered perils wreak havoc in the rented commercial space.
Purchase public liability insurance if the only exposures worry you the most are personal injury claims and property damage claims from vendors, customers, visitors, and other third parties.
Get general liability insurance if you want to have an insurance policy that provides comprehensive protection against many types of claims from third parties. While it’s more expensive, general liability insurance is a better option than public liability insurance because of its comprehensiveness.
Your cafe might prepare food improperly and customers might suffer from foodborne illnesses as a result. That’s why it’s smart to get product liability insurance included in coffee insurance. Product liability insurance can be a stand-alone policy or an add-on to general liability insurance that will cover compensation, defense costs, and other legal fees if a customer files a claim for food poisoning, improper food preparation, and foodborne illnesses your business caused.
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Claims from third parties aren’t the only exposures that threaten the survival of your business. An employee might get sick, or a fire might destroy your cafe and other physical business assets - all of these are costly perils for your business. And so consider getting other cafe business insurance, namely:
Commercial property insurance
Workers compensation insurance
The primary function of commercial property insurance is to cover your cafe’s building, whether it's leased or owned. If fire or extreme weather utterly destroys your commercial building, commercial property insurance will reimburse your losses up to the building’s current market value. It’s also possible for fire, theft, vandalism, extreme weather, and other covered perils to damage the cafe building, and commercial property insurance will reimburse losses in this case too.
Commercial property insurance has business equipment and tools coverage and stocks and contents coverage. Let’s discuss how these two inclusions help.
Inside your cafe are an espresso machine, espresso grinder, regular coffee grinder, coffee brewer, decanter, blender, oven, fryer, and other objects used to prepare food and brew beverages. If these become damaged or lost due to fire, theft, vandalism, and other covered perils, business equipment and tools coverage will reimburse your losses.
As for stocks and contents coverage, what does this do? Stocks and contents coverage will reimburse losses if cafe furniture such as tables and chairs, food ingredients, and other items or objects not considered as business equipment are destroyed by fire, theft, vandalism, and other covered perils.
Work-related hazards are very common in food service businesses wherein your cafe business belongs. Here are some exposures that will result in a client becoming injured or sick and needing treatment:
Burns incurred by the use of ovens, fryers, and other cooking equipment
Explosions as caused by defective gas lines
Slip and fall injury caused by wet flooring
Continuous use of specific body parts when cooking food, cleaning the cafe, and serving food to guests that result in repetitive motion injuries
As the employer, it’s your job to take care of employees who are experiencing a work-related injury or disease. Paying for their treatment yourself will cost a lot of money. That’s why get workers' compensation insurance.
Workers' compensation insurance will pay for the treatment of an injured or sick employee’s medical treatment/procedure, hospitalization, rehab, and lost income compensation on your behalf. In a nutshell, workers' compensation insurance ensures that you don’t spend a single penny when giving benefits for work-related hazards.
The lost income compensation workers' compensation provides comes in the form of a weekly allowance equal to two-thirds of the employee’s average weekly wage. By the way, workers' compensation insurance also covers death benefits if the employee dies because of a work-related injury or disease.
This depends on which state your cafe business is located. Some states have workers comp laws that prevent employees from suing employers who have workers' compensation insurance. Check the worker' comp law of your state to know if this is the case.
The penalty differs from one state to the next. Your cafe might face any of the following penalties for not getting workers' compensation insurance:
Cease and desist order
Fine equal to double the amount you would’ve paid for workers' compensation insurance premiums
Fines and imprisonment
Mobile coffee van insurance offers general liability insurance and commercial auto insurance. Workers' compensation insurance and commercial property insurance are available as endorsements. Those who make money through coffee carts can get covered through coffee cart insurance having general liability and equipment breakdown coverage.
Mobile coffee van insurance tends to be more expensive than other kinds of cafe business insurance because of the additional cost of insuring the vehicle that you work out of. Since you’re using your coffee van for business, you’ll need to take out a commercial auto insurance policy on it.
Commercial auto insurance tends to be more expensive than personal auto insurance because insurance companies (rightfully) expect business vehicles to be used more frequently than personal vehicles. This means that there’s a higher baseline chance of your vehicle getting into an accident, increasing the carrier’s risk.
Along with your commercial vehicle insurance, you may need bobtail insurance, as commercial auto insurance policy will not cover you when your vehicle drives without trailer or load. You’ll also still need some of the other policies that we’ve discussed for coffee businesses. For example, public liability coverage will ensure that you don’t have to pay out of pocket if one of your customers gets injured or has their property damaged while getting coffee from you.
Other kinds of coverage that are specific to mobile coffee vans include machinery breakdown coverage, which will cover any compressors or generators that you use on your coffee van. You can also get a loss of business income add-on that will cover you for lost income when your van is being repaired.
|Cost per month
|Cost per year
General liability insurance cost for a coffee van: $30 per month or $360 per year
Commercial auto insurance cost for a coffee van: $60 per month or $720 per year
Product liability insurance cost for a coffee van or trailer is $43 a month or $516 a year
Workers’ compensation insurance cost for a coffee van: $160 per month or $1,920 per year
Business interruption insurance cost for a coffee van: $41 per month or $492 per year
Liquor Liability insurance cost for a coffee van: $33 a month or $396 a year
Insurance for a larger coffee shop is often pretty similar to insuring a small-scale coffee operation - except everything is scaled up. This means that you can typically expect to pay a bit more on your premiums because there’s a higher risk of you having to pay out for damages, whether they be to customers, vendors, business partners, or employees.
The average general liability insurance cost for a large coffee shop or cafe is about $45 per month or $540 per year for a $1 million coverage, though this can vary depending on the size of your operation and your business’s safety culture.
The average public liability insurance cost for a coffee shop or cafe is about $38 per month or $456 per year, with a policy limit of about $1 million per occurrence and a deductible of about $500, meaning that it will typically be cheaper to pay out smaller claims out of pocket.
Much like smaller cafes, larger coffee shop business owners typically opt for a business owner’s policy which bundles together commercial property insurance and general liability insurance, and even business interruption insurance or workers compensation insurance. As with most forms of insurance, getting your policies bundled gets you a discount compared to purchasing each of the component policies individually. However, you may have some other coverage requirements that this bundle does not cover, so be sure to pay attention to that.
Since larger coffee shops tend to have more employees, you can also expect to pay a bit more for your workers’ comp policy. Finally, some larger coffee shops may also sell Irish coffees and other alcoholic beverages, meaning that they’ll also need to pay for a liquor liability policy, which protects your business from damages caused by drunk and intoxicated customers. Some states also require coffee shop businesses and cafes to have liquor liability insurance to get their liquor license.
Here’s a breakdown of cafe insurance cost based on quotes that we received for a medium-sized cafe broader coverage from some of the most popular business insurance carriers:
|Cost per Month
|Cost per Year
|Cafe insurance quotes comparison online
|Cafe insurance with generous liability insurance coverage
Coffee business insurance tends to depend on the kind of cafe that you have started or are already running, and the cheapest type of establishment you can run is a small cafe. It also has the cheapest business insurance. In many cases, internet cafe insurance is around the same price as coverage for a small cafe since there doesn’t tend to be a whole lot of a difference in terms of liability between the two.
Insuring a small cafe tends to be cheaper than insuring a larger one because insurance companies expect you to get fewer customers, which exposes you to less liability and risk over the course of a business day. Smaller cafes also tend to have smaller groups of employees working for them.
Fewer employees in your cafe mean that you can expect to pay less for workers’ compensation insurance. Workers’ compensation coverage pays out when your employees end up getting injured on the job. For example, if one of your baristas ends up burning themselves with a hot pot of coffee.
Like with larger cafes, the most common forms ofbusiness insurance coveragefor small cafes include general liability, workers’ compensation, and public liability insurance coverage.
Here’s a breakdown of the average small cafe insurance cost for each kind of coverage:
|Cost per month
|Cost per year
|Business Owners' Policy
The average general liability insurance cost for a small cafe is $27 per month or $324 per year
The average workers’ compensation insurance cost for a small cafe is $110 per month or $1,320 per year
The average public liability insurance cost for a small cafe or coffee shop is $17 per month or $204 per year
The average liquor liability insurance cost for small cafes and coffee shops is $29 per month or $348 per year
The average product liability insurance cost for small cafes and coffee shop businesses is $34 per month or $408 per year
The average commercial property insurance cost for small cafes and coffee shops is $51 per month or $612 per year
The average business interruption insurance cost for small cafes and coffee shop business is $35 per month or $420 annually
The average Business Owners' Policy (BOP insurance) cost, which bundles general liability insurance, commercial property insurance, and mostly business interruption insurance as well at a discounted rate, is $42.5 a month, or $510 a year
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The reviews below will tell you which companies to approach when looking for insurance for your coffee shop. Read to know each of these carriers' pros, cons, and rate for a $1 million general liability insurance.
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Not an insurance company but an insurance broker
CoverWallet is an insurance broker with an online quotes comparison platform that gives you the quotes of insurance companies offering coverage for cafes. All you have to do is provide basic details about your business and you’ll get numerous accurate insurance quotes in an instant. If you’re ready to get insured, there’s no need to contact the insurance companies where the quotes are from. CoverWallet allows you to purchase the insurance through its website. The company even helps you manage insurance online.
Best for: Cafe insurance quotes comparison online
Average cost: $37 per month
Our rating: 10/10
In-house team of risk management professionals
Allows you to get liability insurance having more than $2 million limit
Customer ratings are somehow poor
Hiscox offers liability insurance policies for cafes having more than $2 million limits. Furthermore, this company has an in-house team of consultants ready to give advice on how to manage risks, so that you can save on premiums.
Best for: Cafe insurance with generous liability insurance coverage
Average cost: $44 per month
Our rating: 9/10
Lonnie Bell Insuranker
Policy Type: Business Insurance
Company name: Employers Insurance
Use anyone except Employers. Period. They are non-transparent and shameful. After I complained long enough to warrant a call from a supervisor, the supervisor called back from a PRIVATE NUMBER (no caller ID), left a message that they are not reversing their decision (without any communication with me), and failed to leave a phone number for me to call back. She was hiding! They also fact find via email and phone calls, which is terrific for speed and communication. However, after setting a precedence of email or phone calls, they send time sensitive information via email, without any heads up... they are hoping you miss it and forfeit via expiration. Evil policies. Go elsewhere.
This place is an absolute joke of a company and should be ashamed of the way they conduct business. I was hurt on the job at the end of July and it took them just shy of 7 weeks to issue out a paycheck to me. Yes the amount was back dated but still. Not many have the luxury of not receiving a paycheck for almost 2 months. To top it all off, the original adjuster marked me down for the wrong state which caused a problem from the get go, I've had 3 different adjusters now since each one can't seem to figure out the simplicity of my claim. All my paperwork which includes, my job, house, and drs visits all are from the same state and city but yet some how I have been filed under a completely different state 1500 miles away. They do not answer your phone calls or emails no matter how many you leave. I've had to escalate my frustrations to the supervisors of each of these individuals in order to even get some kind of response. I've had more communication and information given to me about my claim from the customer service representatives then the actual adjusters.......... please tell me how that works?! A serious overhaul needs to happen here in order to serve your clients the way they deserve to be taken care of. 10/10 do not recommend this company to a single soul on earth
I have never had the displeasure of working with a more incompetent and disrespectful person in my life. I’m an injured worker and the adjuster that was assigned to my case was named Carrie Furgeson. In the past 6 weeks that I’ve been injured and out of work I have only been able to get ahold of her twice, not for lack of trying. I have left countless voicemails, countless emails, and she ignores them all. When I am finally able to get ahold of her I’m greeted with terrible customer service. She is rude, she talks over me and I’m hardly able to get a word in edgewise. She spelled my name wrong on my documents even after I spelled it for her properly countless times, this caused a whole new issue with my bank. I have bill collectors from the hospital calling me demanding payment and Carrie Furgeson won’t do a single thing to help, or to get them paid. All of my documentation is in Colorado, my job is in Colorado, my address is in Colorado, all my Dr offices and appointments have been in Colorado and Carrie still managed to hold my claim because she wasn’t sure what state she needed to file it under. It’s been 6 weeks since my Injury and my company still hasn’t received the wage paperwork to fill out so they can get me my correct wages. When she’s not ignoring me she’s answering my questions with “I don’t know” well I don’t know how she got this job, because apparently she doesn’t know anything about it. She is a disgusting morose individual inside and out and I genuinely wish her the worst in all of her future endeavors. I highly recommend you don’t use this company. Please if you are a business owner and your looking into this company please don’t use them. I’m sure they have the cheapest payment and that’s why companies use them in the first place, but you will be doing your employees a grave disservice by forcing them to venture into this absolute dumpster fire of a company. I would rate 0/5 if possible but 1 was the lowest I was allowed.
Their general liability insurance purchase process is simply the best online experience I've ever had in my life!
As long as they cover your line of business, you're literally covered! best rates, best coverage, best online experience, best professionals, can't be happier that I chose them!