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8 Best Insurance for Coffee Shops [Cost Included]

Do you want to know how much it cost to insure a coffee shop business? If YES, here are 8 best types of general liability insurance policies for coffee shops.

A coffee shop is known to provide people with a place where they can quickly grab a coffee, a pastry, or another specialty drink, and also offers them an exciting space to work, relax, or socialize. However, the cost needed to start a coffee shop business can vary greatly, depending on the size and type of coffee shop you want to open.

Note that your expenses will primarily depend on the type of coffee business you want to start, the specific equipment you need, your location, if you want to include space for a bakery, etc.

A small coffee shop in the corner of an existing building can be started for as little as $5,000, although many cost around $25,000 and $75,000. Free – standing drive – thru can reach around $80,000 and $200,000 to start, and shops with their own seating can be more than $200,000.

In this business, the primary expenses that contribute to the above costs include rent, staffing costs, taxes, insurance, and equipment, such as Point-of-Sale (POS) systems, espresso machines, and so on. Coffee shops make money by charging their customers based on what beverages and food items a customer orders. Note that some coffee shops have problems with people “camping out.”

7 Possible Risks & Exposures Faced By Coffee Shops

If you are unsure of the types of risks that your coffee shop may face, read on to understand the various risks and exposures expected in the industry.

i. Premises liability exposures

These exposures for coffee shops are moderate due to public access to the premises. Customers are expected to move throughout the coffee shop with cups of coffee and other beverages, generating spills that can result in slips and falls. All spills should be cleaned up promptly.

Also note that temperatures of hot beverages must be limited to reduce injuries due to scalding. Older customers and those with mobility limitations are more susceptible to injury should a fall occur. Careful procedures should be in place to assist these customers in transporting beverages to their table.

Floor covering must be in good condition with no frayed or worn spots on carpet and any cracks or holes in flooring. Steps and uneven floor surfaces should be visibly marked. Exits must be well marked, with backup lighting systems in case of power failure.

Also ensure that your parking lots and sidewalks get very good repair, with snow and ice removed, and generally level and free of exposure to slips and falls. Outdoor security and lighting must be consistent with the area. Lists of ingredients should be posted to prevent allergic reactions.

ii. Product liability exposures

This kind of exposure is primarily from contamination, food poisoning and allergic reactions from food and beverages carried off premises for consumption.

Ensure that you take appropriate sanitary measures and note that the posting of product ingredients are important in this kind of business. If your coffee shop imports coffee or gift items directly, it has the exposure of a manufacturer or coffee retailer.

iii. Workers compensation exposures

Note that this exposure is mainly due to slips, fall, puncture wounds, burns, and foreign objects in the eye, heavy and awkward lifting, and interactions with customers. Also note that food handling can result in passing bacteria or viruses, resulting in illness.

Just like with all retail businesses, hold-ups are possible, so employees should be well trained to respond in an adequate manner.

iv. Property exposures

Have it in mind that this exposure can come from electrical wiring, refrigeration units, coffee brewing equipment, and heating and air conditioning systems.

Ensure that all wiring is up to date, up to code, and well maintained. Note that most coffee shops use an espresso machine, which is operated at elevated temperatures and is pressurized. Other equipment include coffee grinders, steamers, blenders, and related or similar property.

Additionally, cooking and baking may also be present but are not usually accompanied by any grease – laden vapours. Spoilage exposure is high if refrigerated goods are sold. Have it in mind that a small fire or a power outage can cause all fresh and frozen goods to be rendered useless.

v. Crime exposures

These exposures are primarily from employee dishonesty and money and securities. Experts suggest you conduct thorough background checks on any employee handling money. Most customers pay in cash. Money should be regularly stripped from the cash drawer and moved to a safe away from the door.

In addition, regular drops should be made to the bank during the day to prevent substantial accumulation of cash. There must be a separation of duties between employees handling deposits and disbursements and reconciling bank statements.

vi. Inland marine exposures

These exposures for coffee shops include computers for tracking inventories and valuable papers and records for employee and supplier records. A fine arts floater will be needed if works of art are displayed for sale.

vii. Business auto exposures

These are generally limited to hired and non – owned liability for employees running errands.

Insurance Policies for a Coffee Shop Business

According to reliable information, the average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small coffee shops range from $37 to $59 per month based on location, size, payroll, sales and experience. However, there are a lot of insurance options in the United States for a coffee shop but there are only a few that are considered crucial:

1. Commercial Property

One of the most important types of coffee shop insurance is property insurance. Commercial property insurance strives to protect your shop premises as well as the equipment and fixtures inside of it from disasters like plumbing mishaps, fires, weather events and more. The exact protection you will have differs from policy to policy.

2. Commercial General Liability

This insurance is also very crucial when it comes to owning and running a coffee shop in the United States. Since people will be visiting your premises, especially a location where wet floors or high temperatures can be a concern, you will definitely need liability insurance. General liability protects your business when things like slips and falls, burns or other mishaps happen.

3. Business Income Insurance

This is a type of insurance that ensures that if your business is not making money for some unforeseen reason that you are still able to pay your bills and keep going until you can get back on track again. This is an unusual type of insurance to most people, but it is a handy option for those who want as much protection as possible.

4. Workers Compensation

This insurance is very needed if you have employees working in your café. Workers compensation pays for employee medical treatment if they are injured on the job. Workers comp may also pay the money for lost wages if they are injured on the job and cannot work.

5. Commercial Auto

In your coffee shop, you may require commercial auto insurance if you are driving company vehicles and doing work for your business. Whether it is you driving or an employee driving, you are expected to acquire commercial auto insurance.

Note that regular liability insurance does not cover business vehicle operation. Although most coffee shops do not have to worry about this, if you do delivery or have to pick up items for your store with a company vehicle then you may need commercial vehicle insurance.

6. Equipment Insurance

In this business, there are some huge investments you have to make in terms of equipment and utensils. Although it depends on what your menu offers, you may need a grill, a commercial walk – in cooler, countertop space, fixtures and various other types of equipment.

You can actually get insurance that protects you in case your equipment quits working. This means that your business will be able to go on even if you have a major piece of equipment that fails.

7. Utility Insurance

Utility insurance is another unpopular insurance option that is available to business owners. Utility insurance can protect you against various utility hazards and damages.

8. Spoilage Insurance

In the United States, once you own a business that serves food, then one of the most important things that you have to worry about is food spoilage. But there is an insurance option for businesses that have to store fresh food on site that protects them in case of large – scale food spoilage.


There are many risks faced by coffee shops every day. The best way that coffee shop owners can protect themselves from these perils is by carrying the right insurance coverage. You should talk to a commercial insurance broker to find out exactly what you need for your coffee shop and what sort of insurance options are available.