If you intend to open a pizza shop business, it is important to note that you will be required to buy insurance policies for the business. This is because, in the United States and most countries of the world, you cannot legally operate a business without buying some mandatory insurance policy covers.
It is important to state that insurance policies are designed to protect you, your staff members, your customers, and your business from claims that can be made on them. Please note that you cannot state how much an insurance policy cover will cost without stating the type of insurance policy you would need for the business.
If you own a pizza shop, you will be exposed to cases like bodily injury, property damage, medical payments, legal defense and judgment, and personal and advertising injury. In this article, we are going to look at the best insurance policy cover that a pizza shop may need and also their cost.
Best Insurance Policy Cover for a Pizza Shop
This insurance protects other staff members from suffering financial losses when your staff member causes an accident. Also, note that this insurance helps pay for injuries and damages to other people when your employee is at fault for an accident that happens in your pizza shop. This business coverage comes in two specific pieces: Bodily injuries and property damages.
Bodily Injury: note that when there is an accident in your pizza shop, the bodily injury portion of your liability insurance caters to the cost of medical care for the victims involved. Have in mind that this coverage pays the medical bills and other expenses.
It also pays for the expenses incurred for rehabilitation, physical therapy, and recuperation. It goes further to cater to the victims of pain and suffering, and if applicable it pays for lost wages due to time off work. When accidents cause fatalities, this coverage also pays for the victim’s funeral expenses.
Property Damage: If your organization is at fault for an accident, the property damages portion of your liability insurance will cater to the cost of repairs that the other person suffered.
Cost of General Liability Insurance: On average, pizza businesses in the United States spend between $500 – $1,200 per year for $1 million in general liability coverage.
Please note that several factors will determine the price of your policy and some of them are;
- Your Location
- Your Deductible
- The Number of Your Employees
- Your per-occurrence limit
- General aggregate limit
Even though general liability insurance protects your business from accidents, it usually doesn’t cover damages that you can avoid. It simply means that a lot of workplace injuries are not covered. In a worst-case scenario, an employee could litigate for the injuries they incurred in the workplace, and that is where workers’ compensation insurance is the most useful.
Note that if an employee ends up with medical expenses from the workplace accident, workers’ compensation insurance can pay them for the time they were out of work, as well as their medical costs. In return, the employee forgoes the right to sue the employer.
Have in mind that this is a mutually beneficial solution, and it is usually the easiest and quickest one as well. Without workers comp in place, you might end up with a month-long legal battle that will drain the wallets of both business and defendant.
Cost of Workers Compensation Insurance: Nationwide, the average cost of workers’ compensation insurance is $936 per employee, per year, or $78 per month.
Medical Payments Insurance
It is important to note that this insurance protects your staff and clients who are in the shop at the time of an auto accident. If anyone is injured, irrespective of who is at fault for the accident, medical payments coverage will cater for the associated medical bills. You should speak with a licensed insurance agent to determine if it is a viable option for your pizza shop.
Cost of Medical Payments Insurance: The average national cost for health insurance is $456 for an individual and $1,152 for a family per month. However, costs vary among the wide selection of health plans.
Product Liability Insurance
Product liability insurance is a type of business insurance that can cover the cost of compensation claims if someone who eats your pizza suffers from stomach upset or any food contamination issue.
The truth is that, even though you did your best to make sure your pizza satisfies all your customers, there’s always a chance someone might decide your product caused them harm. In the event of a lawsuit, product liability insurance would cover your legal fees and any required settlement.
Cost of Product Liability Insurance: The average cost of product liability insurance for products in a low-risk category such as pizza and drinks is about $0.25 per each $100 in revenue.
Commercial Umbrella Insurance
Commercial umbrella insurance provides an extra layer of liability protection by covering costs that go beyond your other liability coverage limits. In other words, commercial umbrella insurance complements your other liability coverages by taking over when your other liability coverage limits have been reached.
Although commercial umbrella insurance is not mandatory for a small pizza shop business it will not be out of place if you go the extra mile to purchase commercial umbrella insurance for your pizza shop business. If you operate several outlets of your pizza shops, then you should make sure you buy commercial umbrella insurance.
Cost of Commercial Umbrella Insurance: Commercial umbrella insurance costs about $40 per month for each $1 million of additional coverage. Your level of risk and how much coverage you buy determine the cost of this policy.
Please note that many small businesses (17%) pay less than $500 per year for umbrella insurance and 36% pay between $500 and $1,000 per year.
It is important to note that the insurance policies listed above are just some of the basic insurance policies you should get if you want to run a pizza shop. Pizza shops have special considerations when it comes to running a business. If you must protect your business from the unforeseen, then you will need custom-tailored insurance for pizza shops.