Running a food and beverage business brings endless range of risks which include equipment damage and breakdown, foodborne illness or even a chef’s injury. No establishment is immune from these risks and the resulting loss of income or cost is a lawsuit that can hurt your bottom line – or even force you to close down.

Having the right insurance can’t prevent these incidents, but it will definitely reduce your risk from a fallout. Here are 3 realistic circumstances that cafes and coffee shops are likely to encounter which may bring about an insurance claim.

1. Fire & Storm
   Businesses in the F&B industry are endlessly exposed to risks all the time. A damage by fire in the kitchen may not be the only mishap that can happen. With its climate changing, Malaysia is now experiencing heavier rain, as well as more severe storms and floods, it is vital to think how would your business recover should such a disaster occur?

   A cafe owner in Petaling Jaya discovered the importance of having the right insurance to cover the contents within its business premise when a severe thunderstorm hit the area in February 2020. Hours of heavy rainfall caused the roof of her cafe to leak through and water built up on the floor. This affected all the electric appliances and power boards located on the wooden flooring. Until a plumber was able to remove the water and an electrician could conduct safety tests, she has to cut off the power to all electrical equipment which included the freezers, refrigerators, deep fryer and stoves. Because of the power shutdown, all her stocks in trade, including fresh meat which was left unrefrigerated for several hours had to be disposed. The water also caused significant damage to the wooden flooring of the café which had to be replaced and several electrical items which had to be repaired or replaced.

   The cafe owner was able to claim for loss of stock, replacement of take-away coffee & tea cups, food containers and paper towel. They were also able to claim for the cleaning of the premise, replacement of the wooden flooring and the repair or replacement cost of several electrical items.

2. Machinery Breakdown and Damage
   Many cafes and coffee shops depend heavily on machinery equipment to operate such as steamers, deep fryers, dishwashers, ovens, refrigerators, coffee machines or even computers and POS systems. This is why it is important for these business owners to purchase the All Risk Insurance to protect their equipment. In the event of any mishap to any of the machinery equipment such as over-heating or breakdown, the policy can cover the repair or replacement cost.

   A baker’s cafe in Kuala Lumpur was thankful that he has included an All Risk cover as part of his business insurance plan when his coffee machine heating element failed, which resulted in the inability to brew a steaming cup of coffee. He immediately contacted a technician to come and repair the coffee machine and was spared from having to fork out money from his own pocket, as it was covered by his insurance policy.

3. Breakage of Glass
   Whether running a café or coffee shop in a mall or in an independent premise, many owners often times may not be aware of the unexpected and expensive cost to repair or replace the glass that is present in their premise such as large window, display counters, glass chiller showcase, fridges, glass partitions and shelving. It is essential to have the Plate Glass Insurance as part of your business insurance plan. This cover will protect your business against any breakage of glass as a result of an accident or an unforeseen incident in your premise. Some even cover the repair or replacement of signage.

   The management of a commercial premise located in Subang in which a cafe is located, specified that the tenant is required to have plate glass insurance as part of the rental agreement. Having this policy turned out to be a benefit for the café owner after strong winds broke four panels of the large exterior glass windows and the main glass door. Instead of having to pay the cost for replacing the glass panels and door from his own pocket, it was covered by the insurance policy.

The above examples illustrate that unexpected disaster even the slightest mishap can offset your business by hundreds and thousands of dollars. If any of these situations would put your business in a financial strain, it’s time to reassess the risks your café or coffee shop face to ensure that it is properly protected.