What Insurance Do I Need For a Cafe?

Posted October 3rd, 2018 by Jason Metz

When you're buying insurance for a small cafe, you can mix and match several coverage types to best fit business needs. For example, you may want coverage for kitchen equipment, liability coverage for customer injuries, and coverage in case you're forced to temporarily close.

One way to get several types of coverage in one policy is with a business owners policy (BOP). This typically includes general liability insurance, property insurance, business interruption insurance and other coverage types to customize your cafe insurance.

Basic insurance for small cafes

Business general liability insurance

This covers the cafe against property damage and injury lawsuits. A slip and fall is a common injury claim.

Business income (also known as business interruption) insurance

If you're forced to relocate or temporarily close because of a problem covered by the policy, this helps cover extra expenses.

Business property insurance

Your cafe is likely full of furniture, kitchen equipment and inventory. This covers your building and its contents from problems such as theft, vandalism and fire.

Workers compensation

If you have employees helping you run your cafe, workers compensation covers medical bills and some lost wages in case they're injured or become ill from work-related tasks.

Additional insurance for small cafes

Business income from dependent properties – If your cafe relies on another business, such as a bakery to deliver fresh pastries each morning, your business would be impacted if the bakery failed to deliver. This coverage may help replace lost income or extra expenses when a key supplier impacts your business.

Business off-premises – Your cafe might cater off-site events, like delivering coffee and bagels to a nearby office. Business property insurance might only cover the primary place of business. If you're taking inventory and equipment off-premises, consider this coverage.

Commercial auto insurance – If you use a vehicle for business-related tasks, such as picking up baked goods for your cafe, you'll need a commercial auto insurance policy. A personal auto policy generally won't cover business-related accidents.

Employment practices liability (EPLI) – This helps cover lawsuits that employees' legal rights were violated, such as discrimination, harassment and wrongful termination.

Equipment breakdown – Kitchen equipment is a lifeline to a successful cafe. If any of your equipment breaks, this coverage helps replace or repair it, and may cover lost income if the business was interrupted.

Food contamination coverage – A government authority (such as the board of health) could require you to temporarily close because of food contamination. This helps cover lost income and other issues like having contaminated equipment cleaned and replacing spoiled food.