There are a range of different insurance options that particularly apply to hospitality businesses. This post will give you a run down of the different types available and what they cover.
Firstly though, you might be wondering why take out insurance for your hospitality business? Here are 5 good reasons why:
Firstly though, you might be wondering why take out insurance for your hospitality business? Here are 5 good reasons why:
- Increase credibility with customers
- Protect your clients
- Protect your employees
- Protect against the unknown
- Avoid financial ruin
1. Public Liability Insurance
Public liability insurance covers you when a customer or member of the public suffers a loss or injury because of your business operation. For example someone slips on your floor.
2. Product Liability Insurance
Product liability insurance covers your business when customers are affected by one of your products. In the case of a hospitality business this is most likely to occur when a customer gets ill because of something they ate or drunk on your premises.
3. Workers Compensation
Workers compensation covers the cost of benefits paid to an employee if they suffer an injury at work. Workers compensation is compulsory in Australia if you employ staff and pay wages (over $7,5000 in the case of NSW & VIC). It is levied by individual state governments so different rules, regulations and costs apply according to the location of your hospitality venue.
4. Theft
Theft insurance covers you in the event that your premises is burgled. It covers the theft of your contents and your stock. It can also cover your contents and stock from attempted theft, an armed hold up or an assault. For example if your POS system was damaged but not stolen during an attempted robbery then theft insurance will cover this.
5. Money
Money insurance covers your hospitality business for the loss of money, cheques, credit cards, vouchers and cab charges that are held on your premises or while they are in transit. This type of insurance is a good option if your regularly carry money to the bank.
6. Fraud and Dishonesty
An insurance option that hopefully you won't ever have to call upon. It covers your hospitality business against the theft of businesses property or money by any of your employees. It also applies if an employee is colluding with others outside the business.
7. Property Contents
Property contents is insurance that covers you in the case of a major disaster. For example a fire, storm, lightning, explosion or earthquake. Flood insurance is normally not covered under this type of policy and should be looked at separately. Property contents will cover the cost of replacing items like refrigerators, ovens, tables and chairs and usually includes the removal of debris from your premises.
8. Equipment
What would you do if your freezer suddenly stopped working or your air conditioner broke down on a 40 degree day? It is most likely that your business would be unable or limited in its ability to trade. Equipment insurance covers you in the event of equipment breakdown like this.
9. Stock
You've protect the freezer with your equipment insurance but what about the stock in it? Deterioration of stock works side-by-side with equipment insurance. It will cover you against food spoilage when equipment fails.
10. Glass
For a hospitality business a shattered shop front is not a good look. It's also dangerous and leaves your premises exposed. Glass insurance will come in handy if there is an accidental breakage. It covers replacement of the glass, temporary security to protect your premises, any glass sign writing and the value of damaged stock as a result of the accident.
11. Business Interruption
Business interruption insurance covers you when circumstances out of your control force you to cease trading. A good way to think of business interruption insurance is that it picks up when your other insurance stops. So for example your premises might be insured in the event of a fire. Your policy may limit payment to the replacement of damaged contents but what about the loss of revenue resulting from the interruption? This is when business interruption insurance kicks in.
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