Business Insurance for Ice Cream Parlors

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Business insurance is designed to protect a business owner's financial assets and is an essential investment for an ice cream parlor.

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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 AN ICE CREAM PARLOR

Example 1: A customer injures herself when she slips on a wet bathroom floor.  General liability insurance should cover the cost of her medical expenses.  If she sues the company over the loss, it would pay your legal expenses and damages awarded by the court.

Example 2: While taking the trash to the dumpster, your employee loses control of the handcart and it runs into a patron’s vehicle. General liability insurance should cover the cost to repair their vehicle.

Example 3: You are thinking of expanding to a new location but require extra capital. The bank requires evidence of $1 million in liability insurance as part of the loan terms. A general liability policy will cover these terms.

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, ice cream parlors 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 ice cream parlors 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 ice cream parlors should obtain:

Product Liability Insurance

Product liability insurance is critical for every business owner that manufactures, supplies, or sells products.  If a customer claims illness or injury due to a product purchased from your business, they could sue you for damages.  This policy would cover awarded damages and associated legal fees.  

Since you can tailor product liability policies to the specific needs of the business, it’s important to have a candid conversation with your insurance agent before purchasing this policy.  This coverage is generally sold as part of a business owners policy (BOP).

Commercial Property Insurance

This type of business requires special equipment and a workspace tailored to its specific operating needs. If the building and its contents suffer damages from a covered loss, commercial property insurance would pay to repair or replace damaged items.  Whether you own or rent, you can tailor this policy to meet the needs of your business.  

You can purchase commercial property insurance as part of a business owner’s policy (BOP).  Entrepreneurs should discuss policy terms to ensure a policy covers losses at replacement cost and that there is no gap in coverage.

Types of Coverage Some ice cream parlors May Need

In addition to the policies outlined above, there are a few other types of coverage your ice cream parlor 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.

Commercial Auto Insurance

An ice cream parlor may need vehicles to transport its products or supplies. If you or a team member get in an auto accident conducting business-related activities, commercial auto insurance can pay for the repairs to damaged vehicles, as well as medical expenses, liability claims, and lost equipment.  To protect your ice cream parlor from suffering a financial loss due to this claim, business owners should consider purchasing limits higher than the state-mandated minimum requirement.    

You can purchase commercial auto insurance as a standalone policy or as part of a business owner’s policy (BOP), depending upon the carrier.

Workers Compensation Insurance

State law requires business owners to carry workers' compensation on each of their employees.  This coverage offers reimbursement for medical bills and a part of the employee’s wages while they recover from their injury or illness.  If they decide to sue for additional damages, the policy would also offer legal representation and pay damages awarded to the claimant.

Workers compensation is generally purchased as a standalone policy.

Business Interruption insurance

Business interruption insurance provides fixed expenses and loss of income if a business shuts down due to a covered loss. Some policies also offer extra expense coverage, which sets the business up at a temporary location during building repairs.

Also known as business income insurance, this insurance is generally offered as part of a business owners’ policy (BOP) package.

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.