Running a food business comes with its share of risks. From injuries to equipment failure and food spoilage, cafés, restaurants and catering businesses face a range of challenges. Business insurance helps protect your customers, staff, stock and premises, helping you recover quickly when things go wrong.
What types of business insurance are there for cafés and restaurants?
If you run a café, restaurant or catering business in Australia, there’s one type of cover you must legally have, as well as several others that are strongly recommended or even necessary in some cases.
Workers compensation insurance
All businesses in Australia with employees are legally required to hold workers compensation insurance. This covers staff if they suffer a work-related injury or illness, helping pay for medical expenses, rehabilitation and lost wages.
While it’s the only form of business insurance that’s mandatory by law, it’s far from the only cover hospitality businesses should consider.
Public liability insurance
Public liability insurance covers a business if a customer or member of the public is injured, or their property is damaged, because of business activities – for example, a customer slipping on a wet floor.
Note that although it’s not legally mandated for hospitality businesses, in practice many councils and commercial landlords require tenants to take out public liability insurance and often set minimum cover amounts (commonly $5 million, $10 million or $20 million).
Product liability insurance
Often bundled with public liability insurance, product liability insurance covers claims relating to the products you sell – in the case of restaurants, food and drink. This type of insurance is especially important in the hospitality industry given the higher exposure to food safety incidents.
Glass insurance
Glass insurance covers accidental breakage of internal and external glass, including shopfront windows, display cabinets and mirrors.
Risks your café or restaurant may face
- Food poisoning and contamination
- Food allergies
- Slips, trips and falls
- Burns and kitchen injuries
- Machinery and equipment breakdown
- Fire and smoke damage
- Food spoilage
- Theft
- Property damage
Contents insurance
Contents insurance covers items inside your premises, such as furniture in the dining and bar areas, kitchen equipment like refrigerators, freezers and ovens, as well as stock, protecting them against events like fire and theft.
Business interruption insurance
If your café or restaurant is forced to close temporarily due to an insured event, business interruption insurance can help cover lost income and ongoing expenses like rent and wages
This can be critical in hospitality, where even short closures can have a major impact on cash flow.
Supply chain disruption
Business insurance packages
Many insurers offer small business insurance packages that combine multiple types of cover into a single policy. This can be simpler and more cost-effective than taking out separate policies.
For cafés, restaurants and catering businesses, useful types of insurance to package include:
- Machinery breakdown: covers commercial kitchen equipment like ovens, dishwashers and coffee machines.
- Portable equipment: for items used off-site, such as catering equipment.
- Goods in transit: covers stock while being delivered.
- Money cover: protects against theft of cash from the premises or in transit.
- Employee dishonesty: covers losses caused by fraudulent or dishonest acts by staff.
The right combination will depend on the size of your business, whether you own or lease the premises and the type of food service you provide.
Why compare business insurance policies through Savvy?
How much will insurance cost for my café or restaurant?
According to BizCover, the average cost of business insurance for restaurants is $198 per month. However, the cost for your café or restaurant will depend on factors such as location, business size, previous claims and the types of cover you choose.
For example, a small café might consider:
- Public liability insurance
- Contents insurance
- Glass cover
- Money cover
- Machinery breakdown cover
For this cover, the café could be looking at premiums of around $190 per month, based on quotes sourced through BizCover.
How to insure café and restaurant equipment
Restaurants and cafés rely on a wide range of equipment, from kitchen appliances like ovens, stoves and blenders to coffee machines, refrigerators and other specialty tools. To protect this equipment, you’ll typically want two types of cover:
- Contents insurance to cover damage to equipment caused by events like fire, theft, storm damage or accidental breakage.
- Machinery breakdown insurance to cover mechanical or electrical failure of equipment, helping pay for repairs or replacement.
If you operate a food truck or mobile business, you may also want portable equipment insurance to protect tools and appliances while in transit or at off-site events.
Steps to insure your business equipment
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Inventory your equipment
Make a list of all items you want to insure and their value.
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Get started with Savvy
We’ll connect you with our business insurance partner to find cover tailored to your café or restaurant.
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Build your insurance package
Add contents and machinery breakdown cover, and any other relevant insurance for your business.
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Compare quotes
Review coverage options and premiums to find the right fit for your food business.
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Take out your cover
Your restaurant equipment will be covered against damage or breakdown.
