Running a café or coffee shop business is a dream for many, but it is not one without hard work and risks. No matter how big or small your business is, having the right insurance in place is essential for protecting your business against unexpected challenges.

Let’s take a look at the different types of insurance you need to consider for your café or coffee shop business.

There are many things to think about when starting your own business, accounting, marketing and day to day tasks, but one of the first things you should arrange is your business insurance. Not only will it give you peace of mind but it will provide financial protection for when you need it most.

Every café and coffee shop business is different, with its own unique insurance needs. Fortunately, there are a variety of insurance options designed to protect your business from these risks.


Why is Public Liability insurance essential for your café business?

If your business caused property damage or personal injury to a third-party, action might be taken against you resulting in legal proceedings. The cost to defend your claim can run into thousands of dollars, even if you are not at fault. Could your café or coffee shop business bounce back after such an expense?

Worse still, if the court finds you were liable, the compensation you may be ordered to pay the victim can could up being enough to cripple your business as well as your personal finances.

The support of Public Liability insurance not only protects your business finances but your personal finances too, provided the incident is covered by your policy and is within your sum insured.


Insurance options for your café/coffee shop business

Public Liability

One of the common types of insurance for café and coffee shop business owners is Public Liability insurance. When you are dealing with customers, suppliers and the general public, the opportunity for something to go wrong becomes a reality.

Public Liability is designed to protect your business against claims for accidental injury to a third party or damage to their property, caused by your business activities. It provides financial protection for your business by covering the associated legal and defence expenses and compensation.

Everyday risks that cafes and coffee shop businesses face often come in the form of slips and falls. Spilled drinks and food are constant hazards which could cause serious injury and result in a costly claim. Getting the right Public Liability insurance policy helps safeguard your business from a whole range of potential harms and hazards.


Product Liability insurance

As a café or coffee shop owner, one of the biggest threats you face is food poisoning. All it takes is a batch of milk that’s beyond its expiry date to quickly turn your business’ reputation sour.

Product Liability cover forms part of a Public Liability insurance policy. It provides protection against claims of injury by a third-party caused by a product you have supplied them, for example, food or beverage products your café sells. Product Liability insurance will cover the costs of damages awarded and the costs associated with investigating and defending the claim made against your business.

It is important to check the definition of what a ‘product’ is within your insurance policy wording. It generally refers to anything that has been manufactured, constructed, erected, assembled, installed, grown, extracted, produced or processed, treated, altered, modified, repaired, serviced, bottled, labelled, handled, sold, supplied, re-supplied imported or exported by you or on your behalf.


Café Business Insurance

You’ve combined all the best ingredients of hard-work, time and sourcing the best beans to make your café/coffee shop business a reality, which is why it is so important to make sure you have the right cover in place to protect your business assets.

Maintaining a successful café business relies on a variety of elements like a functional kitchen and equipment, the fresh produce in your fridge, coffee machines, right down to the chairs and tables, knives and forks.

Café Business insurance protects the essential items that help you stay in business. This cover can insure against fire, storm, accidental damage or theft. There are a range of insurance options to choose from, so you can tailor a policy to suit the needs of your business. Here are some types of cover to consider:

Building cover: if you own the building your café or coffee shop operates from, you will want to be able to quickly repair or rebuild it if you were to experience water damage from burst pipes or a fire in the kitchen.

Contents: protect against damage to your business contents and stock from events like fire, storm and other perils.

Machinery Breakdown: when you rely on fridges to keep your produce fresh, coffee machines to make your daily brews and kitchen appliances to cook up a storm it’s important to have them covered.

Machinery Breakdown cover offers protection for the related costs of repairing or placing your insured machinery following a breakdown. You can also select an extension of cover for loss of stock which will provide financial protection for any food spoilage which may occur due to your fridge experiencing motor burnout or various other causes.

Business Interruption: having to close your business’ doors for even just a couple of days could have a devastating impact on your finances. If you had to repair or rebuild your café due to major damage caused by fire, storm or other perils, how could your business survive financially?

Business Interruption insurance provides cover for loss of income and the increased expenses of running your café or coffee shop, when you cannot operate normally due to damage caused by an insurable event.

*It is important to note that this kind of cover is only available if you insure your Building or Contents.

Glass: covers both external and internal glass that is accidentally damaged or broken through theft or vandalism. It covers windows, mirrors, porcelain and illuminated signs. You may want to consider this cover if your café has a large shopfront or it is a requirement of your premises lease agreement to insure glass.

Money: you handle money daily (tip jar included) making it an asset you need to consider insuring. Money cover can protect your hard-earned dollars, if it is lost, stolen or damaged whilst on your premises. It is also protected whilst in transit to or from your business or when held in your personal care.


Management Liability

As your business grows, you may start to employ more staff to help handle the extra load, introducing a new range of risks associated with operating a business. Management Liability helps protect your business from the risks and exposures associated with running a company. The areas which it can provide cover for include:

  • Employee Dishonesty: theft or crime committed by employees including theft of money or property.
  • Employment Practices Liability: protects against allegations of bullying, sexual harassment, unfair dismissal and discrimination.
  • OH&S issues
  • Correct disposal of waste and garbage: if your café deals grease. Incorrect disposal could result in you and your business receiving a hefty fine.


Tax Audit

From coffee carts to large cafés, when it comes to the Australian Tax Office (ATO) all sizes of businesses are in their sights. Many café and coffee shop business owners underestimate just how time-consuming and expensive a tax audit can be.

Tax Audit insurance can alleviate the stress of preparing an audit by covering the costs of the professional fees incurred from preparing the audit. This includes the assistance of accountants, lawyers and bookkeepers.


Café and coffee shop insurance quotes

We understand you’ve got enough on your plate when it comes to making time to compare and arrange your café insurance costs. Let the team at Public Liability Australia do the shopping around for you, providing multiple quotes for café insurance for you to select from.

With just a few clicks or a quick phone call to one of our insurance specialists, you can be covered quicker than making a cuppa.

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