Coffee Shop Business Insurance

Getting insurance for your coffee shop is essential.

Coffee shops need to be protected against things like claims for damages resulting from foodborne illnesses, disputes about employment, and slip and fall injuries.

For example, a customer slips on an unmarked wet floor in your store, or the coffee you serve is hot enough to cause burns to employees and customers.

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

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

Best Insurance for a Coffee Shop

General liability insurance is — generally speaking — one of the most important insurance policies for coffee shops.

Some of the risks general liability insurance covers are:

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

To ensure comprehensive coverage, your coffee shop may also want to bear in mind some of the following insurance policies in addition to general liability:

  • Workers’ compensation insurance
  • Commercial property insurance
  • Product liability insurance
  • Data breach insurance

As you start to look for business insurance, you will realize that the providers you can buy from typically fall into one of two categories:

  • Traditional brick-and-mortar insurers, such as The Hartford and Nationwide, use insurance agents and physical storefronts to provide their customers with the coverage they need. However, due to the high overheads this approach necessitates, traditional insurers can be more expensive.
  • Online insurers, such as Tivly and Next, use their website and AI to provide accurate, tailored quotes. Due to this primarily digital approach, online insurers are known for their more affordable prices.

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Cost of General Liability Insurance

On average, coffee shops in America spend between $500 - $1,200 per year for $1 million in general liability coverage.

Compare the average cost of general liability insurance for a coffee shop to other professional industries using the graph below:

Graph showing average price of general liability insurance prices per industry

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.

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Common Situations That General Liability Insurance May Cover for a Coffee Shop

Example 1: A friend is visiting your new coffee shop when she stumbles on some uneven tile and bumps into your display shelves, bringing them down on top of her head. She is seriously injured and requires immediate medical attention. Your general liability policy will likely cover her medical bills.

Example 2: You’re bringing a few new chairs into the coffee shop, and a customer stops to let you pass by. As you back into the doorway with the dolly, you stumble and lose control of it. The dolly hits the customer, knocking her into the glass door and cutting her badly. She is angry and wants you to pay for her medical care. General liability insurance will likely cover her medical expenses and any possible legal fees.

Example 3: After interviewing a potential new barista, you give her a tour of the breakroom where she slips and falls on the wet floor. There was no caution sign displayed and she threatens to take you to court for her injuries, plus pain and suffering. Your general liability coverage will help pay for her medical bills as well as legal fees and any settlement costs.

Other Types of Coverage Coffee Shops 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 coverage is required in most states for any business that employs part-time or full-time workers. With this coverage, your employees’ medical bills will be covered if they are injured on the job. If they can’t return to work, they may be eligible to receive disability benefits as well. 

Commercial Property Insurance

If your business property is damaged in an accident, it can be nearly impossible financially to replace everything on your own. Commercial property insurance will work to repair or replace your equipment, supplies, and owned real estate so that you can get back to business as soon as possible and not have to pay out of pocket.

Product Liability Insurance

While your team works hard to offer the highest quality products to your customers, there is always the chance that a customer may claim that one of your products caused them to become ill or injured. With product liability coverage, you can rest easy knowing that your legal defense and any resulting settlement from a claim filed against you will be covered.

Data Breach Insurance

Offering a customer loyalty program is a great way to thank your long-time customers for coming back again and again. When they sign-up for the program, they typically provide you with sensitive personal information that could be targeted by hackers. Data breach insurance can protect your business and offer an additional layer of financial protection in the event of a cyber attack and a resulting lawsuit.

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 coffee shop:

  • 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.

Coffee Shop Business Insurance FAQ

Can I buy business insurance online for my coffee shop?

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.

What is included in a business owner’s policy?

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.

What is the difference between business insurance and general liability insurance?

"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.

Do I need insurance before I start a coffee shop?

Yes, protecting your coffee shop with comprehensive business insurance should be prioritized before it launches. This ensures that any risks your business might face are mitigated, as well as protect your assets from the potential financial losses of these liabilities.

Additionally, in cases where your business is mandated by law to carry some form of insurance, acquiring it before you start your coffee shop will help you to comply with legal obligations

Will insurance protect my coffee shop from everything?

Not necessarily. Certain exceptions may be written directly into your coffee shop insurance policy, and some perils may be entirely uninsurable.

Do I need business insurance if I already have an LLC?

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.

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