Operating a café takes a village. From the manager to the cooks, to the baristas and the waiters, there is a wide range of jobs to keep the establishment going and contribute to its success, especially during peak times. However, due to the versatility in services, some accidents could happen, which consequently injure the customers or even the employees. To prevent this, insurance is obtained, which allows the business to avoid any financial loss.
Types of Café Insurance
Café insurance can be different combinations of cover depending on which insurance company you choose, but there are some general policies that all insurers provide.
Public liability insurance
Public liability insurance is especially encouraged for café businesses as hundreds of people enter the store daily and so higher risk of unwanted accidents occurring. A café is a safety hazard for multiple reasons:
- Wet floors are a frequent occurrence.
- There are hot liquids that could be spilt onto customers.
- Devices could be damaged if an employee spills a drink over them.
Additionally, serving incorrectly stored or even expired food could cause potential food poisoning and lead to hospitalisation if customers ingest it. If any of these events happened, the café would be held liable when the injured party files a claim. So they would be subject to the customer’s medical expenses or the replacement of their damaged property. Thus, obtaining this insurance is more cost-effective.
2. Building Insurance
Building insurance means that the structure of the premises is insured, and the insurance company pays for any repair of damage. The premium could cost anywhere from hundreds to thousands of pounds depending on the building’s size, location, and overall value. A more expensive building to build from scratch poses a higher risk to the insurer than a smaller one.
Additionally, if it is located close to the water, the premium is higher too. If the building is damaged from fire, flood or storm, or vandalised and destroyed, the cost to fix it is provided by the insurer. Conversely, it can be detrimental to a small business to pay for these costs without any help and, consequently, even lead to the failure of the business, which is why this cover is encouraged heavily.
3. Business Equipment Insurance
Business equipment insurance protects the contents inside the building. In a café, this means the coffee machines, coffee bean grinders, drips, ovens, dishwashers, filtration systems, and POS systems. While replacing these appliances due to age or internal damage is not covered with this policy, the destruction due to weather damage or theft is. If you want a cover supplementary to this, equipment breakdown insurance also covers internal damage like that due to electrical losses, explosions, refrigeration losses and any similar incidents. A café cannot work without its equipment, and so this cover should be considered.
4. Business Interruption Insurance
Business interruption insurance is aimed at businesses that would lose significant amounts of money if operations were delayed. Cafés are forced to shut due to circumstances beyond their control, like fires, floods, lightning or theft, and lose their income in the period that it takes to repair the damage and resume regular working hours.
When they gather enough money to start repairs, find a company to do this process, and restore the building, the café remains closed, so sales and revenue are not made. The income that is lost could go on for months. Alternatively, business interruption insurance covers the pay lost in the period where the café is not working, equal to the estimated income the café would have made. Thus, when the restoration is finally over, it is as if the delay never happened finance-wise.
5. Employers’ Liability Insurance
Employers’ liability insurance is necessary for cafés because there are many workers, and thereby the law requires that they be obtained. Suppose the machines or slips burn a worker in the same way a member of the public could. In that case, the insurer would pay for their medical expenses regarding check-ups and hospital visits and cover their salary whilst they are unfit to work. Moreover, this policy benefits both the café and the workers because it takes care of both.
There are over 26,000 coffee shops in the United Kingdom, all operating to make a profit and develop. Unfortunately, if an accident occurs and you are not insured, this could cause devastating financial loss and thwart any plans for success. The solution for this risk is to find the most suitable insurance policies for your café and obtain them so that you do not have to worry about them in the future.
Read more about what kind of business insurance you need here.
Other useful links about business insurance:
Public Liability Insurance
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