Business Insurance for Frozen Yogurt Shops

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Business insurance is designed to protect a business owner's financial assets and is an essential investment for a frozen yogurt shop.

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About General Liability Insurance

All businesses, regardless of industry, face risks that should be covered by insurance. The most common and comprehensive type of policy business owners invest in is general liability insurance (or CGL).

Some of the risks CGL insurance covers are:

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

While businesses aren't legally required to carry general liability insurance, operating without it is extremely risky. If your business is sued, you could end up facing fees totaling hundreds of thousands of dollars (or more). Having a sufficient CGL policy in place to help compensate for these damages is the only way to prevent this type of event from devastating your business.

Learn more about the risks covered by general liability insurance.

COMMON SITUATIONS THAT GENERAL LIABILITY INSURANCE WOULD COVER FOR A FROZEN YOGURT SHOP

Example 1: As a customer is leaving your shop, she holds the door open for another customer who then stops to check his phone in the doorway. The door swings shut as he's stopped, knocking him to the ground and causing him to break his wrist. He is angry and threatens to sue your shop for damages. General liability insurance would help cover his medical bills and potential legal fees you have..

Example 2: As your regular Monday delivery comes in, the overhead door on your loading dock malfunctions and severely damages the delivery van. The driver is unable to complete his orders for the day and the inventory inside is ruined. Your general liability policy will likely cover the repairs to the delivery van and replace the damaged inventory.

Example 3: After cleaning up a yogurt spill in the lobby, a customer slips on the wet floor before you can set out a caution sign. They are badly injured and demand that you pay for their medical expenses. With general liability insurance, you can file a claim and likely have all of their medical costs covered.

Of course, this is not an exhaustive list of perils a general liability insurance policy will cover, and some conditions may result in a particular peril not being covered. It's always best to talk to your agent in-depth about the specifics of your policy to avoid blind spots in coverage.

Cost of General Liability Insurance

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

Check out the chart below for a snapshot of average CGL expenditure across a variety of industries:

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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Other Types of Coverage frozen yogurt 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 other types of insurance all frozen yogurt shops should obtain:

Product Liability Insurance

There is always a chance that a customer will claim that your product has caused them harm in some way. If this happens and they decide to pursue legal action, product liability insurance will pay for your legal fees and the cost of any settlement awarded in a lawsuit.

Workers’ Compensation Insurance

Workers’ compensation insurance will cover the cost of an employee’s medical bills if they are injured on the job as well as help cover lost wages if they are unable to work due to the injury. This coverage is legally required in most states for any company that has employees.

Types of Coverage Some frozen yogurt shops May Need

In addition to the policies outlined above, there are a few other types of coverage your frozen yogurt shop may require depending on certain aspects of your operations. Some of these might not apply to you, so be sure to ask your agent which policies are right for your business.

Data Breach Insurance

Many retail and food service businesses now offer loyalty programs to their customers. To do this, it’s often necessary to store sensitive personal and financial information on your business computers. But keeping this information on file can make your computer system vulnerable to cyber-attacks. With data breach coverage, you can protect your business from possible lawsuits following a cyber attack. 

Commercial Auto Insurance

If you deliver your frozen yogurt to any retail locations in your area, you should carry commercial auto insurance. In fact, you need this coverage even if you use your personal car for work duties. Your personal auto insurance won’t cover any accidents related to your job, so be sure to protect yourself and your employees with commercial auto insurance protection.

Additional Steps to Protect Your Business

Although it's easy (and essential) to invest in business insurance, it should not be your frontline defense. Yes, insurance will compensate for your business' financial losses after an incident occurs, but it's much better to avoid losses altogether.

 

With this in mind, here are three things you can do to better protect your business:

  • Use legally robust contracts and other business documents. (We offer free templates for some of the most common legal forms.)
  • Set up a limited liability company (LLC) to protect your personal assets. (Refer to our guide for step-by-step instructions on how to form an LLC in your state.)
  • Streamline your business' internal processes. This will remove unnecessary variables from common tasks and create a safe, consistent environment for conducting business.

Frequently Asked Questions

What is included in a business owner’s policy?

A typical business owner's policy includes general liability, business interruption, and 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 business?

You should invest in 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 business from everything?

Not necessarily. Certain exceptions may be written directly into your policy, and some perils may be entirely uninsurable. Be sure to discuss the scope of your policy in-depth with your agent to avoid being blindsided by holes in your coverage.