Have you got the right insurance for your coffee/café shop?

Have you got the right insurance for your coffee/café shop?

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The coffee industry has evolved dramatically in the last 10 years, where business owners have become more innovative in how coffee is served and delivered to clientele. The old traditional way of going to a café or coffee bar for your caffeine fix has given way to more innovative and different styles of cafés and coffee shops. There are more coffee shops in the CBD’s of Australia than ever before and the people’s love affair with coffee has grown dramatically over this period of time.

Coffee/café owners have had to become innovative in their designs, styles and choices of coffee so that they can attract particular clientele to their business. Some have included roasters in their premises to give a completely different feel.

There are lots of reasons why the general public go to a coffee shop or café. There could be a business meeting with some colleagues, or the mum who has just dropped the kids off and is catching up with a friend, or the Sunday morning breakfast with some friends at the local coffee shop.

Whatever the reason, a good café or coffee shop knows its clientele and caters for them. Also, the timeframe they operate i.e. 7 days a week or 5 days a week, which is subject to the location and also the type of clientele that would visit.

Then the question is, did they visit because of the great coffee, the food, the environment, the free Wi-Fi, everyone has a reason. So therefore, the café coffee operator and their staff need to ensure they keep coming back for a reason.

Also, in Australia today, there are many choices in coffee beans, from single origin to blends to different types of roasting levels. Coupled with this are the coffee machines and grinders which have evolved and become sophisticated to make the coffee experience truly unique to different clientele.

Therefore it’s no longer the traditional café or coffee shop, which means that owners and operators need to embrace the new way of doing business to attract and maintain customers in a changing environment.

Why I mentioned all of the above is because insurance is no different. In fact there are still insurances stuck in the old ways, just after your money, but they don’t give you a lot of benefits and features. The marketplace has become crowded, everyone wants to sell insurance to you and they all claim to be experts in your field.

The issues with insurance are that most people don’t understand the clauses, endorsements and covers that the policy provides. You normally find out what you are not covered for when you have a claim, which frustrates the owners and can be costly. This is especially true when you feel like they should understand your industry and know what covers you require.

Insurance policies have had to evolve with the coffee industry to ensure that the unique way of doing business is adequately and appropriately covered. As this industry is fairly new, there aren’t many companies capable of providing the comprehensive insurance cover required for such a type of business.

Due to the unique nature of the coffee shop and café business, selecting the right covers with the right insurer is critical for your ongoing business success.

 

What to look for when you are choosing insurance for your coffee shop or café?

 

  • Property Damage/Fire and Perils: A good policy will have full accidental damage cover that also includes your stock as part of your contents and any hired equipment which is your responsibility. Also, if you have a roaster, you need to check that you do not have self-combustion clause. What does this mean? It’s in regards to heating and a good policy does not have this clause in it. Which gives you peace of mind in the event of a claim and there will be no grey area.
  • Theft Cover: This cover is important to cover your contents, especially equipment, but more important if the policy has the ability to cover non-forcible entry to cover electronic items being stolen. I.e. (laptops, tablets, phones, EFTPOS machines, etc.)
  • Business Interruption: This section of the policy a lot of business owners do not take seriously as they believe it will never happen to them. But if you can’t operate your business because of events out of your control, that means there is no income coming in to pay the bills and depending on the turnover of your business you may be forced to close the doors. A good business interruption policy is one based with no underinsurance clause so that you have certainty in the event of a claim.

You need to note most policies in the marketplace have an underinsurance clause which means if you do not insure your gross profits correctly, they can reduce your claim amount to the underinsured amount by the percentage that you have underestimated.

  • Glass Replacement: This is always important for internal and external glass cover, but what makes a good cover is the additional benefits for sign writing and neon signs etc. that your business may have. Also some companies have very low limits in this area.
  • Machinery and Electronic Breakdown: This is the highest claimed area for coffee shops and cafés and it’s an area a lot of owners either do not have the appropriate cover or lack additional cover to cover electronic items. This industry is no different to other industries in regards to ever changing technology where equipment like coffee machines have computer boards and display screens etc. The issue is that a lot of owners are not sure if their policies cover both electronic and mechanical breakdown. So a policy that automatically covers both electronic and mechanical breakdown should be the first choice. Also, some companies ask you to specify everything which can be very frustrating and if you don’t specify it you may not be covered.
  • Money Cover: As business owners, if you have a high turnover and handle a lot of cash, it’s important to have this cover, but especially important that it extends cover to safes as well as in private residence.
  • Public and Products Liability: This goes without saying, it’s probably the most important section of the policy and if you operate within a shopping center it is compulsory that you have this cover. It protects you as the owner in the event of claims in relation to the products you sell, be it coffee or food and also third party injury. Also the ability to extend cover to the footpath and courtyards as a lot of coffee shops tend to use these facilities to provide services to their clientele.
  • Tax Audit: With governments trying to find new revenue, this has been an area where regulators like the ATO are checking up on all businesses to see if they are paying their fair share of taxes and income. The cost of doing audits is becoming expensive hence a good policy that enables to provide money in a circumstance like this is very important for a business owner.
  • Management Liability: As coffee shops/cafés become large, employing lots of staff and depending on their business structures i.e. companies it becomes very important to have a policy that covers you for legal costs in relation to unfair dismissals, fraud, Occupational Health and Safety for defense costs or investigation costs.

All insurance policies in the marketplace have varying excesses, benefits and features that vary from company to company. So therefore it’s very difficult for individual owners to actually compare product to product and understand that they have the best policy for their business.

Why Just Coffee Insurance?

Since 2008 Just Coffee Insurance has been specialising in all aspects of the coffee industry. We understand the complexities and the ever changing environment and risk associated with this particular industry. We also constantly update our products and services to meet with the demands and changes of this industry. Some of our products are uniquely designed for the marketplace and therefore are exclusive to Just Coffee Insurance. Our claims service is done over the telephone and we manage and handle all claims through our office.

Call our office at Just Coffee Insurance for your competitive free quote on 1300 605 061 or email info@justcoffeeinsurance.com.au or visit our website www.justcoffeeinsurance.com.au

 

Disclaimer

Just coffee insurance is an Authorised Representative of National Adviser Services Pty Ltd (NAS insurance brokers) licensed General Insurance Broker. AFS Licence No.233750 The Authorised Representative No. is 240699. Disclaimer: This article is not intended to give advice and should not

be relied on as it is only of general nature. We suggest you consult those who are licenced in this industry to give advice that can provide a recommendation based on your situation or circumstances.