What insurance do I need for a café?

By Nathaniel Dalby on Small Business UK - Advice and Ideas for UK Small Businesses and SMEs

Whether you’re showing off your carefully crafted latte art, creating cupcakes or getting famous for your flat whites, it’s important to be covered by café insurance.

Why do you need café insurance?

As a café, there’s always a risk of accidents and damage in the kitchen or when serving. But as a customer-facing business that serves food and drink to the public, you’ll also need to be covered for public and product liability should your products or services cause an injury or damage someone’s property.

Café insurance coverage

Café businesses usually take out one or all of these types of cover:

• Employers’ liability insurance – Covers you if an employee becomes ill or injured while working. This is a legal requirement if you employ one or more people.
• Product liability insurance – Covers you if someone becomes ill or injured by a product you have supplied e.g. food and drink.
• Public liability insurance – This covers you in case your product or service causes injury or damage to a customer or someone who isn’t an employee.
• Business contents insurance – Covers any business equipment and tools you have against theft, fire or damage. Check your provider to see if this covers perishable stock such as food and ingredients.
• Legal expenses insurance – In case you need to pay legal costs associated with your business.
• Personal accident insurance – This protects you (or anyone you name in the policy) in the case of an accident, and covers you both in and out of working hours.

How could café insurance protect your business?

Here are a few scenarios where having cafe insurance coverage could come in handy:

• A customer getting an allergic reaction to food you’ve served
• A waiter spilling hot coffee on themselves or a customer
• Your coffee machine being stolen during a burglary

Choosing a café insurance policy

When choosing café insurance policies, it’s good to ask yourself:

• What types of workers do I employ? – You’ll need to have employers’ liability insurance no matter the type of employees you have, including full/part time, contractors or permanent staff.
• Will my business grow in the future? – It’s good to plan for your business growing by getting flexible cover that can grow with you.
• Which liability cover limit should I choose? – Make sure you take into consideration the maximum amount your business could lose in terms of public liability and choose a policy that reflects it.

FAQs

• What types of business insurance are mandatory? Employers’ liability insurance is the only type of business insurance you’re legally mandated to have, which is applicable no matter how many employees you have. However, as a public-facing business, it’s strongly recommended to have public liability insurance to go alongside this.
• Should I get standalone policies or a bundled insurance package? This will depend on the types of insurance you need for your business. Insurance bundles can be helpful in getting the full coverage, and can often be tailored to your needs. However, if you’re already covered for one aspect of your business, you might only need a standalone policy. Always compare policies to make sure you’re getting the best value.
• What insurance do I need to run my business from home? – If you’re running your business from home (e.g. food preparation), you’ll still need many of the same types of insurance. Business contents insurance, for example, guarantees your equipment, stock and tools are covered beyond your standard home insurance.
• Am I covered for alcohol? If you’re serving alcohol alongside food (rather than just serving alcohol), you’ll be covered by public and product liability insurance.

See also:

• What business insurance do I need as a sole trader? – What are the main types of business insurance for a sole trader and what if I’m working from home?
• Employers’ liability insurance – what is it and do you need it? – Here, we answer all of your questions around employers’ liability insurance – how much will you pay and what happens if you don’t have it?
• Business insurance: 10 common questions answered – Without the right business insurance, your company could find itself in financial hot water.

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