Business Insurance for Cafes and Restaurants

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Why do hospitality venues need business insurance?

What kind of business insurance might suit cafes, restaurants, and other hospitality venues?

Is business insurance mandatory for cafes, restaurants, and other hospitality venues?

How much does business insurance for cafes and restaurants cost?

What should I consider when choosing business insurance for my cafe or restaurant?

Where can I find and compare business insurance?

Long story short

Business insurance may help hospo venues bounce back from costly accidents

From slip-and-fall injuries to kitchen fires, insurance can help cover medical bills, repairs, and lost income.

Public liability insurance is a commonly purchased policy by hospitality businesses

It can cover property damage and third-party injuries – even food poisoning – and may be required by landlords.

Business interruption insurance can keep the lights on when disaster strikes

If a fire or storm forces you to close, this cover may help pay rent, utilities, and relocation costs.

The average monthly cost for restaurant insurance is around $198

Costs can vary significantly based on business type, size, location, and policy inclusions – so customisation is key.

Why do hospitality venues need business insurance?

When you’re finally following your dream of opening your very first cafe or restaurant, the last thing you want is something going wrong. Unfortunately, accidents can and do happen.

This is where insurance for cafes, restaurants, and other hospitality venues comes in.

It can offer financial protection in the case of a slip-and-fall accident, as well as other incidents that may affect your business’s operations – like property damage, equipment damage, and injuries to third parties.

Depending on your policy, it might cover some or all of the costs associated with a claim, such as medical expenses, the price of repairing or replacing property, lost income, and legal fees.

Common risks of running a cafe or restaurant

• Property damage to your business’s belongings, like furniture, equipment, and inventory
• Events that are out of your control, such as fires, storms, and other natural disasters
• Customers or suppliers getting injured on your premises, or having their property damaged as a result of your business activities

What kind of business insurance might suit cafes, restaurants, and other hospitality venues?

There’s no single plan that’s suitable for every cafe or restaurant. But there are several types of insurance that you can combine in a business insurance package, depending on your needs. Here are a few you might consider.

Public liability insurance

Public liability insurance covers injuries or property damage to third parties that happen as a result of your business activities.

Let’s say your employee accidentally spills a piping-hot long black on a customer, and it causes a serious burn that requires medical attention. Public liability insurance could help pay for the customer’s medical expenses and any lost income resulting from the incident.

Risks like food poisoning are sometimes covered, too, which is obviously a huge concern for any business that serves food.

Business interruption insurance

Say a fire starts in the kitchen and the Beatles’ ‘Helter Skelter’ becomes the soundtrack for the arvo. You might have to pause your venue’s operations for a while.

Business interruption insurance could help you pay for ongoing costs like rent, utilities, and lost income until you and your kitchen are back on your feet. If you end up having to relocate to entirely new premises, it could also cover the cost of moving.

Business interruption insurance can also include events like natural disasters, disruptions to services like electricity and water, and issues with other businesses in your supply chain.

Machinery breakdown insurance

It’s great when the customers are flocking and business is booming – but what if your coffee machine, refrigerator, or stoves suddenly conk and disrupt that tasty inflow of cash?

Machinery breakdown insurance helps keep the losses to a minimum by covering the costs of repairing or replacing a machine that’s broken down unexpectedly. It’s important to note that regular wear and tear, maintenance, or replacing expendable parts are typically not included in this type of cover.

Contents insurance

If you’ve got expensive equipment like state-of-the-art coffee machines, commercial stand mixers, or refrigerators, contents insurance may cover all or part of the cost of repairing or replacing it.

This kind of coverage typically includes malicious or accidental damage and natural disasters like fires and earthquakes. It doesn’t typically include theft – you can get that separately.

Theft insurance

Sadly, thieves could target your cafe or restaurant and take off with anything they can get their hands on, including costly ingredients, alcohol, furnishings, computers, and digital displays. There’s also the potential damage from breaking and entering to think about.

In such instances, and when forcible or violent entry is involved, theft insurance can cover your losses as a result of theft or attempted theft. You can typically add theft insurance to your business insurance package, and help protect your business from an unplanned, all-you-can-steal buffet!

Glass insurance

It’s almost a given that your cafe or restaurant will have some form of glass on-site – whether it’s windows, doors, or display cases showing off your freshly baked friands. And as we all know, glass is very much prone to breakage.

Glass insurance can help cover the cost of repairing or replacing broken glass.

Is business insurance mandatory for cafes, restaurants, and other hospitality venues?

If you’re renting your premises, many landlords may require you to have public liability insurance and glass insurance. If you do need it, the minimum amount of insurance you’ll need is normally specified in your lease.

One type of insurance that’s an absolute non-negotiable is workers’ compensation*. It covers your employees’ medical expenses and lost wages if they’re injured or get sick at work. Unfortunately, we can’t help you compare workers’ compensation insurance – but whether you run a cafe, restaurant, pub, or hotel, you’ll need a workers’ compensation policy if you have employees.

*BizCover does not offer workers’ compensation insurance.

Helpful tip

The risks of running a hospo business vary from food poisoning to a cyber attack to a power outage – and that’s just scratching the surface! In fact, certain types of insurance, like glass insurance, may be required if you’re a tenant on a commercial lease. That’s why you can, and probably should, customise a business insurance pack for all-round protection from the expected (and unexpected).

Adrian Bennett

General Manager for General Insurance

How much does business insurance for cafes and restaurants cost?

On average, a restaurant business can expect to pay $198 per month for business insurance.¹BizCover – Insurance for Restaurants That said, business insurance costs vary widely between hospitality businesses, insurance policies, and providers. Several factors go into determining cost, including the following examples.

What should I consider when choosing business insurance for my cafe or restaurant?

There are a few things to think about before you dive in to find an insurance policy for your business. See examples below.

• The risks: It helps to be certain of the common risks of running a cafe or restaurant, so you can tailor a business insurance pack to help ensure that you’ll be covered.
• Your cover limit: This is the maximum amount you’ll be covered for if someone makes a claim. So, it might help to research potential claim costs for the type of business you run.
• Exclusions: Business insurance won’t cover you for everything under the sun, so it’s best to be prepared. For instance, theft insurance might not cover thefts that didn’t involve forced or violent entry.
• The premium: When you consider a policy, you’ll probably want to consider how the premium fits into your budget. That said, while affordability is a factor, it’s important to ensure that you’re not underinsured.

Where can I find and compare business insurance?

If you’re keen to snap up some insurance to cover your hospitality business, you can use our nifty business insurance comparison tool, in partnership with BizCover. The tool lets you compare policies from a range of providers to find the right coverage for your cafe, restaurant, or hospitality venue.