Coffee Shop Business Insurance

Every coffee shop needs insurance. Knowing which type of insurance you need and the best place to get it is the next step.

This article will cover the main types of business insurance and help you find the best coffee shop insurance.

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

Best Insurance for a Coffee Shop

The most common and comprehensive type of coffee shop business insurance is general liability insurance. We recommend general liability insurance as your first line of defense against a variety of the most general and commonly occurring claims.

Some of the risks general liability insurance covers are:

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

While a coffee shop isn’t legally required to carry general liability insurance, operating without it is extremely risky. If your coffee shop is sued, you could face fees totaling hundreds of thousands of dollars (or more).

Find the Right Policy at the Best Rate

Using a fully online insurance provider saves time and money and offers the most accurate quotes.

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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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Finding the most affordable premium starts with getting accurate quotes from highly rated providers.

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.

Check out our review of the Best Small Business Insurance Companies.

Other Types of Coverage Coffee Shopes 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 other types of insurance all coffee shops should obtain: 

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.

Business Insurance Is the Best Way to Protect Your Business

If you're starting a new business, then you need business insurance. It's as simple as that. The protection offered by an LLC will protect your personal assets, but your business's assets are still open to liability in the case of a lawsuit or other loss.

Be sure that everything you've built is safe by getting business insurance.

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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?

You should invest in business insurance coverage for your business before your first interaction with a customer. Although the cost of insurance may seem high for a brand new business, it’s best to be proactive when it comes to protecting your assets. After all, you can’t buy insurance to cover a loss that has already occurred.

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.

Is general liability the same as business owners?

A general liability insurance policy covers only liability losses. A business owner's policy covers both liability and property losses.

How do I choose the best general liability insurance?

The best general liability coverage for your business really depends on the amount of coverage you’re comfortable with and how often you expect to file a claim. A relatively safe business with a very low risk of accident or legal liability could opt for lower premiums with higher deductibles. 

However, if you are in an accident or injury-prone industry or are making advertising claims about the effectiveness of your service or product, you may wish to consider more extensive coverage. We recommend using a digital insurance provider like Next Insurance.

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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