What Every Coffee Shop Business Needs: Insurance
Your Coffee Shop Business Needs a Great Location, Great Coffee, Excellent Customer Service … and Insurance!
Starting and opening a coffee shop requires a lot of expertise – knowledge about coffee, knowledge of coffee equipment, knowledge of laws and regulations, taxes, pricing, leases, hiring, and marketing. But what about insurance? Many coffee shop business owners often forget about this – though it may be required from a number of sources including banks, property managers, investors, etc.
Getting insurance for your coffee business is an absolute necessity and shouldn’t be overlooked. While we are not an insurance broker, there are a few things that we would like to mention – as a courtesy – as it pertains to business insurance – you must get it!
“There is nothing sexy about insurance, but we're going to bring this subject up anyway – because it's important!”
There are a number of local and regional insurance agents in your area that can help you address many of the specifics. What we would like to do here is cover the basics of why you need insurance and possibly what kind of insurance. If you don’t know where to begin – don’t worry, we’ll cover the very basics. All we want to do here – as with our other articles on the process of opening and launching a coffee business – is to get your mind primed and ready to tackle many of the multiple issues that you will need to be familiar with when you open your coffee business.
To be sure, we strongly encourage you to separate your business by establishing a legal structure – such as a corporation or an LLC. Establishing an LLC in your state will help you establish your bank account and other vital business legal documents that you need to have. Additionally, operating under an LLC, for example, may prevent you from being personally responsible and risking your personal assets during the normal course of business dealings.
Types of Insurance To Consider for Covering Your Coffee Shop Business or Drive Thru
General Liability Insurance for Your Coffee Business
General liability insurance is a must have for any business – especially coffee business will often be in frequent contact with patrons. Basically, general liability insurance protects you when your baristas, your coffee, or any of your other products cause harm to other people. Certainly, you will want to ask your insurance agent about the specifics in this coverage, but having a blanket liability coverage for your entire business will be worth the money. This is especially true if you have any employees – any of their actions (intentional or not) may harm your customers – who can turn around and look to you for compensation or even a lawsuit.
Business Property (Interior and Exterior Coverage)
Protecting your physical business property is critical. We’ve seen a number of occasions where business owners had their property damaged and/or stolen – only to be so grateful that it is covered by their insurance. You will need to work out the details with your insurance agent but it should include any outdoor or exterior property such as signage (signs), railings, umbrellas, decks, patios, lightening, etc.
Business Income Coverage
Depending on your situation and your location, you may consider getting business income coverage. Business income coverage will help you maintain your ability to pay for necessary fixed and variable coffee shop business expenses. Remember to get very careful detail coverage information from your agent so that you can make the assessment on whether or not you actually need this coverage for your café or coffee business.
Equipment (Breakdown) Coverage
As you will soon find out (if you haven’t already done the research), coffee equipment can/will be expensive. Having your equipment covered by insurance (especially while you may still financing your equipment) is essential. You may be thinking that you don’t have to get insurance because your equipment is brand new and probably won't break down. However, your employees can often unintentionally break your equipment. Accident happen. Get the full skinny on the matter with your insurance agent.
Your Coffee Shop Business Success: Everything Comes Down To Planning
Whether you are just starting out or you have thought long hard about your coffee business and want to move to the next level, let us help you. First, explore our free article database that focuses on helping stir the imagination and thought-process of aspiring coffee shop entrepreneurs. When you are ready, consider that you should start with a coffee business plan. Even if you simply keep it for yourself, having a coffee shop plan will help you itemize all the elements you need to launch and open your coffee shop business.
A coffee business plan may not be the most “fun” aspect of starting your coffee business, but you will absolutely benefit from the hours of planning. Our Coffee Shop Business Plan Guide is really a package to help you start your coffee business plan and give you the necessary knowledge base necessary to understand many aspects of the retail coffee business. We invite you to consider our very affordable coffee shop business planning guide – which we believe will save you dozens of hours in research and information about starting your coffee shop business!
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