Last Updated: May 23, 2024, 12:58 pm by TRUiC Team

Bubble Tea Business Insurance

Getting insurance for your bubble tea business is essential.

Bubble tea businesses need to be protected against claims arising from things like allergic reactions, product liability, and negligence.

For example, an employee accidentally gives a customer tea that contains a known allergen, or an employee slips and falls, requiring extended medical leave.

We’ll help you find the most personalized and affordable coverage for your unique business.

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Recommended: Next Insurance is dedicated to matching small businesses with the right policy at the best price.

Best Insurance for a Bubble Tea Business

General liability insurance is — generally speaking — one of the most important insurance policies for bubble tea businesses. 

Some of the risks general liability insurance covers are:

  • Bodily injury
  • Property damage
  • Medical payments
  • Legal defense and judgment
  • Personal and advertising injury

Some additional policies that are worth looking into for your bubble tea business include:

  • Workers’ compensation insurance
  • Commercial auto insurance

Deciding which provider to buy your business coverage from can be a tough decision; however, being aware of the two main types of providers is a good starting point:

  • Traditional brick-and-mortar insurers — Firms based in one or more physical locations (e.g., Nationwide, Hiscox, and The Hartford). This group has a solid reputation for reliability, though their quotes are quite often more expensive as well.
  • Online insurers — Firms without tangible storefronts or offices (e.g., Tivly and Next), which enables them to offer competitive prices due to their lower overheads. What’s more, they can match the reliability and accuracy of traditional insurers’ policies by using powerful AI to generate personalized quotes.

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Cost of General Liability Insurance

The average bubble tea store in America spends between $500-$1,200 per year for $1 million in general liability coverage.

Compare the average cost of general liability insurance for a bubble tea business to other professional industries using the graph below.

Several factors will determine the price of your policy. These include your:

  • Location
  • Deductible
  • Number of employees
  • Per-occurrence limit
  • General aggregate limit

You may be able to acquire general liability insurance at a discounted rate by purchasing it as part of a business owner’s policy (BOP) rather than as a standalone policy.

A BOP is a more comprehensive solution that includes multiple forms of coverage, such as business interruption and property insurance.

Graph showing average price of general liability insurance prices per industry

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Find the Best Rate

Discover the best coverage at the lowest rate in our cheapest business insurance review.

Common Situations That General Liability Insurance May Cover for a Bubble Tea Business

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Example 1: One of your customers slips on spilled liquid and sustains a head injury, which requires them to stay home from work for two months. General liability insurance would cover any medical expenses, legal fees, and/or settlements related to the accident.

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Example 2: A customer takes one of your products home and leaves it out for someone to eat. That person is allergic to an ingredient in the product. General liability insurance will usually cover illnesses that are brought on by one of your products.

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Example 3: You take your equipment off-site for a special event, and while you are carrying it inside, you drop it and injure an employee of the venue. The venue does not cover all of the costs of that person's injuries. General liability insurance may cover medical expenses related to the incident as well as protect you from any lawsuits brought by the venue or the employee.

Other Types of Coverage Bubble Tea Businesses Need

While general liability is the most important type of insurance to have, there are several other forms of coverage you should be aware of. Below are some of the most common types of coverage:

 Workers' Compensation Insurance

Workers' compensation insurance is typically legally required of a business that has part-time or full-time employees. It covers expenses related to on-the-job incidents such as burn injuries or illnesses that are contracted from handling raw food materials.

 Commercial Auto Insurance

If you have company vehicles that are used for business, then you need the protection of a commercial auto insurance plan. This will protect against damage to the company vehicle or other property that occurs while an employee is driving. This is an especially important insurance package to have if you do off-site catering events.

Additional Steps To Protect Your Business

Although it’s easy (and essential) to invest in business insurance, it shouldn’t be your only defense.

Here are several things you can do to better protect your bubble tea business:

  • Use legally robust contracts and other business documents. (We offer free templates for some of the most common legal forms.)
  • Set up an LLC or corporation to protect your personal assets. (Visit our step-by-step guides to learn how to form an LLC or corporation in your state.)
  • Stay up to date with business licensing.
  • Maintain your corporate veil.

Bubble Tea Business Insurance FAQ

Yes, absolutely. You will need to first get a quote from an online business insurance provider like Next Insurance. Next allows you to then purchase a policy immediately and your coverage will be active within 48 hours.

A typical business owner’s policy includes general liability, business interruption, and commercial property insurance. However, BOPs are often customizable, so your agent may recommend adding professional liability, commercial auto, or other types of coverage to your package depending on your company’s needs.

"Business insurance" is a generic term used to describe many different types of coverage a business may need. General liability insurance, on the other hand, is a specific type of coverage that business owners need to protect their assets.

It’s highly recommended that you adequately safeguard your bubble tea business from the risks inherent to this industry with business insurance before it opens up shop. Failing to do so could really hinder its long-term growth.

In addition to this, a lack of insurance can open your bubble tea business up to legal problems in cases where specific policies are an operational requirement (e.g., workers’ compensation insurance).

Not necessarily. Certain exceptions may be written directly into your bubble tea business insurance policy, and some perils may be entirely uninsurable.

Yes, an LLC is meant to create a legal barrier between your business and your personal assets and credit. If you haven’t formed an LLC yet, use our Form an LLC guide to get started.

An LLC doesn’t protect your business assets from lawsuits and liability– that’s where business insurance comes in. Business insurance helps protect your business from liability and risk.