Cafes are one of the classic small businesses in Australia.
Just like any small business, there are plenty of risk involved, and it’s important to protect yourself and your business within insurance.
What insurance does a cafe need? Public liability is certainly one of the big ones, but there is plenty more as we’ll cover in this guide.
What insurance does a cafe need?
As a minimum to open your cafe you’ll need public liability insurance. This will almost certainly be a requirement on the lease for your new premises.
But if that’s the only insurance you take out for your cafe, you’ll be leaving yourself massively exposed. Other insurance types a cafe owner should consider include the following:
- Public liability
- Machinery breakdown
- Business interruption
We’ll take a look at each of these covers in a little more detail:
Public liability insurance
As already mentioned, public liability insurance is most commonly required form of cafe insurance. The reason is that virtually any lease you sign is going to have a mandatory public liability requirement.
Whilst of the subject of leases, you will also generally find that you lease will have a requirement for glass insurance. This covers glass windows and doors within the premises.
Increasingly we’re becoming a cashless society, and many people are now tapping their credit card in exchange for a flat white rather than handing over a fiver.
But you’re probably still holding a decent amount of cash in your cafe at any given time, so it’s important to protect it.
Money cover will insure your physical cash both in the premises and potentially in transit to and from the bank depending on the policy you have.
Theft, Contents & Property
We’ve grouped these different categories together, but basically we’re talking about the physical assets within your cafe.
This could be your equipment, your tables and chairs, or anything really that you own and is stored within your premises.
You can insure these items for a range of risks including fire, flood, accidental damage, theft and more.
Policies will often have different limits for different risks, so you should discus these with your insurance broker to ensure you’re adequately protected.
Imagine if your coffee machine went down one day? Or if you’re offering food, a vital part of your kitchen stopped working.
What sort of impact would that have on your cafe? Machinery breakdown insurance can protect your cafe from some of this risk associated with your equipment.
Another option here is deterioration of stock. For example if you lose a fridge or cold room full of food, you could be down hundreds or even thousands of dollars.
Deterioration of stock insurance can protect you from this risk.
These are both covers worth discussing with your insurance broker.
Sometimes events totally out of your control can affect your cafe.
Imagine if a car ran into the front of your cafe and caused significant damage. Hopefully no one was injured and you had all of the contents properly insured.
That’s all good and well, but how do you keep afloat for a few weeks or more until your cafe is ready to open again?
Business interruption insurance can protect your revenue for a period of time whilst your cafe is unable to operate.
Unless you’re operating a one-person coffee cart, you’re most likely going to have employees in your cafe.
You’ll need to protect them via workers compensation insurance. The rules for workers compensation vary slightly from state to state, so it’s best to contact the relevant authority in your state for more information.
All of the cafe insurance types we’ve detailed above are really about protecting your business and your staff.
But what about yourself as the owner of the cafe? What if you’re the one who suffers and injury or illness and you can’t work?
Income protection, along with life insurance and TPD insurance can provide a huge amount of protection in this area.
You’ll need to speak with a financial adviser rather than an insurance broker about these types of cover, but they are still super important for any cafe owner.
Quotes and advice
On the surface a cafe might appear to be a relatively straightforward business, but in reality each one is different and presents its own unique risks and needs.
We strongly recommend speaking with an insurance broker who can go through your needs with you to put together the right cafe insurance package.
For more information or to obtain a quote please click here.