How To Open A Café and Make Sure Your Café Insurance Will Protect You
According to the Financial Times, around 1.7 billion cups of coffee are served in cafés each year in the UK. The coffee shop sector is booming, increasing by 10% in 2015 with a total of 20,728 outlets amassing a combined turnover of £7.9 billion. With high profit margins to be made on each cup, you sell, opening a café can be a financially rewarding move and one that gives you the freedom to be your own boss and do something you enjoy.
But what about the risks?
You’ll face competition from big name brands and other cafes, and running your own business requires more than just coming up with a great concept for your cafe and securing the best location. As with any business, there’s essential paperwork, including licenses, hygiene training, and insurance to be sorted or you’ll risk your café closing down.
Get yourself covered for every eventuality
As important as your selection of coffee blends, cakes, and ambience, but easier to put off thinking about, is the essential insurance that goes with running a successful cafe. Without it, your business could go under, so it makes sense to carefully consider what you need and take the time to get the best value deal.
Every café is different, but you should consider:
Employer’s liability insurance – this is a legal requirement if you employ anyone, even if they’re a family member, only work part-time or are sub-contracted. Without it, you can face fines and if anything does go wrong enormous legal fees. You must take out cover up to £5million, but most policies offer protection up to £10million. You can read more guidance on employers liability insurance from The Health and Safety Executive (HSE).
Buildings and content cover – you’ll need specific business insurance for your café. Carefully consider costs of replacement of fixtures and fittings and don’t be tempted to skimp. Your property is at higher risk than a domestic home, and if you’re under insured it can be financially devastating.
Stock cover – if your stock became damaged, what impact would replacing it have on your business? Equipment such as fridges and freezers can fail or you might suffer from a power cut in the night without realizing it, leaving hundreds of pounds worth of stock to go to waste. Cover the costs with stock insurance.
Public liability insurance – this protects you from claims for damage from the public as a result of something to do with your business, including food poisoning or slips and trips. It’s not compulsory, but can be considered an essential especially in today’s no-win no-fee world. Guidance launched in February this year has increased the fines you could face based on business size, up to a maximum of £3million.
Money cover – you’ll have lots of cash in your till each day making you a target for thieves. Losing a day or two’s takings could have a devastating impact on your cash-flow, so take out specific insurance cover for cash on your premises and in transit to the bank.
Legal cover – if someone makes a claim against you, or you need to make a legal claim against a supplier, legal cover insurance will help cover the costs.
Commercial vehicle insurance – if your business vehicle has an accident will it affect your stock supply or how you trade? Make sure your vehicle is legal to run on the road and can be replaced quickly in the case of accident or theft, so you’re not left without essential transport.
Key personnel insurance – can your business cope if a key member of staff leaves? This insurance offers financial compensation to help you manage. If you’re concerned what would happen to your business if you were unable to work, consider personal injury insurance.
Business interruption – if you have to close your business can’t trade but the bills still have to be paid. This insurance helps cover the costs of wages and invoices etc until you’re back up and running again.
Cost-effective insurance from industry specialists
From traditional ye olde tea rooms serving up cream-laden slices of cake and ‘greasy spoons’ to artisan coffee shops and al fresco beach cafes, we understand that every café business is unique. Our expert team has over 20 years of experience in the industry and has excellent links with specialist insurance providers so we can find you the best prices.
We create bespoke insurance packages meet your individual needs so you’re not paying out for anything you don’t need but are getting the right level of cover for you.
Get a quote from our dedicated team.