Insurance for Cafes and Restaurants

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, though, accidents can and do happen. 

This is where insurance for cafes, restaurants, bars, pubs, hotels 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 something, lost income and legal fees. 

What kind of cover might suit cafes, restaurants and bars? 

There’s no single cover for cafes, restaurants and bars, but there are several types of insurance that could come in very handy. 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. 

Let’s say you accidentally spill a piping-hot long black on a customer and it causes a serious burn and some medical costs. Public liability insurance could help pay for the customer’s medical expenses and lost income they may suffer as a result of 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 you’re unable to operate. You might have to pause your venue’s operations for a while. 

Business interruption insurance (available through a business insurance package) could help 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, too. 

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.

Contents insurance 

If you’ve got expensive equipment like state-of-the-art coffee machines, commercial stand mixers or refrigerators, contents insurance (part of a business insurance package) 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 fire and flood.

Glass insurance 

It’s almost a given that your cafe, restaurant or bar 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 (also available in a business insurance package) can help cover the cost of repairing or replacing broken glass. 

How much does business insurance cost? 

Business insurance costs vary widely between hospitality businesses, insurance policies and providers.  

Several factors go into determining cost, including: 

• The kind of business you run. Different businesses face different risks. For instance, a restaurant may face more food safety risks than a bar that doesn’t serve meals.
• The size of your business. Bigger businesses generally have higher potential for claims, simply because they’ve got larger venues, more people working for them and greater exposure to claims.
• Your location. Where your business operates can have a massive influence on your insurance costs, because of factors like local crime rates and the risk of natural disasters – like if your brewery is in a bushfire-prone area.
• Policy specifics. You might opt to lower your excess or choose additional policy inclusions, which can impact your costs. 
   

Is business insurance mandatory for cafes, restaurants and bars? 

If you’re renting your premises, many landlords require public liability insurance and/or glass insurance. If you do need it, the minimum amount of insurance you’ll need will be specified in your lease. 

One type of insurance that’s an absolute non-negotiable is Workers Compensation*, which covers your employees’ medical expenses and lost wages if they’re injured or get sick at work. No matter where your cafe, restaurant, bar, pub or hotel is located in Australia, you’ll need it if you have employees.

*(Please note, BizCover currently does not offer Workers Compensation insurance.)

Where can I find and compare business insurance? 

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