Cafe Insurance: Protecting Your Coffee Shop Business

Understanding Cafe Risks

Cafes and coffee shops face a unique combination of risks. You're serving food and drinks to the public, operating commercial kitchen equipment, and managing a busy premises with high customer footfall. Each of these creates potential liability.

Key risks include:

• Food safety incidents: Allergic reactions, food poisoning
• Customer injuries: Slips, trips, burns from hot drinks
• Equipment failure: Coffee machines, refrigeration, ovens
• Fire risk: Commercial kitchens have elevated fire risk
• Stock spoilage: Perishable goods if refrigeration fails
• Staff injuries: Burns, cuts, manual handling

Essential Covers for Cafes

A comprehensive cafe insurance policy should include:

• Public liability (including food & drink cover)
• Employers' liability (legal requirement if you have staff)
• Contents and stock insurance
• Business interruption cover
• Equipment breakdown cover
• Money cover
• Glass and signage cover

The specific covers and limits you need depend on your cafe's size, menu complexity, and whether you own or lease the premises.

Food & Drink Liability

Standard public liability policies may exclude or limit cover for food-related claims. Cafe insurance should specifically include:

Products Liability

Covers claims arising from food or drinks you've served. If a customer becomes ill from something they consumed at your cafe, this cover protects you.

Allergen Liability

With strict allergen labelling laws (Natasha's Law), cafes must clearly communicate allergen information. If a customer has an allergic reaction due to incorrect information, you could face a significant claim.

• Ensure your policy covers food and drink products
• Check allergen-related claims are included
• Verify the policy covers food prepared on and off premises
• Consider higher limits if you serve high-risk items (nuts, shellfish)

Equipment Cover

Commercial coffee machines, refrigeration units, and kitchen equipment are expensive to repair or replace. Equipment breakdown cover protects against:

• Mechanical and electrical breakdown
• Damage from power surges
• Accidental damage
• Theft of equipment

Stock Spoilage

If your refrigeration fails, you could lose significant stock. Stock spoilage cover (sometimes called deterioration of stock) pays for perishable goods lost due to equipment breakdown or power failure.

This is particularly important for cafes that stock:

• Fresh milk and dairy products
• Fresh food for sandwiches and meals
• Cakes and pastries
• Frozen goods

Additional Covers to Consider

Business Interruption

If you can't trade due to fire, flood, or other insured events, business interruption cover replaces your lost income. Essential for any cafe that relies on daily takings.

Outdoor Furniture

If you have outdoor seating, ensure your policy covers tables, chairs, parasols, and heaters against theft, storm damage, and vandalism.

Delivery Cover

If you offer delivery services (directly or through apps), you may need additional cover for goods in transit and delivery-related liability.

Legal Expenses

Covers legal costs for employment disputes, contract issues, and regulatory investigations. Useful given the complexity of employment law in hospitality.

Cyber Insurance

If you take card payments, store customer data, or use online ordering systems, cyber cover protects against data breaches and system failures.

Getting the Right Cover

When arranging cafe insurance, you'll need to provide:

• Business address and whether you own or lease
• Annual turnover
• Number of employees
• Value of contents and equipment
• Value of stock (including peak levels)
• Details of food preparation (hot food, cold food, both)
• Whether you serve alcohol
• Any delivery services offered
• Claims history

Cafe insurance is a specialist product. Working with a broker who understands hospitality businesses can help you find comprehensive cover that addresses your specific risks.