Cafe Insurance in Australia: A Guide for Cafe Owners

A cafe in Australia commonly arranges public and products liability insurance and a business pack for equipment, stock and glass. Employers add workers compensation, and leases and council permits may set insurance conditions of their own.

This guide looks at cafe insurance for a small leased cafe: the espresso machine, display fridges, glass shopfront, takeaway trade and a few footpath tables. For a cafe like this, cafe business insurance is usually a mix of policies.

Cover depends on the policy and insurer you choose. Check the policy wording and its terms and conditions for what is and isn't included.

Cafe insurance at a glance

What insurance does a small leased cafe commonly arrange?

Many small cafes start with two policies: public and products liability, and a business pack. Each policy below is subject to the policy terms, conditions and exclusions.

Public and products liability insurance for cafes

Public liability insurance is designed to cover claims if someone is injured or their property is damaged in connection with your business. For a cafe, that could be a customer slipping on a wet floor or a hot drink spilt during service. Products liability is designed to cover claims for injury or damage caused by a product you made, sold or supplied, once it has left your hands.

For a cafe, the product is the food and drink. Public liability and products liability are usually bundled as public and products liability. upcover's guide to public liability vs products liability insurance explains the difference in more detail.

Business pack insurance for cafes

A business pack bundles several covers into one policy. It commonly includes property (contents and stock), business interruption, glass, theft, money and public and products liability. Options may include machinery breakdown and electronic equipment.

The property sections are designed to cover your contents and stock against insured damage, such as fire or storm. Some insurers offer these sections as a separate commercial property policy. If you lease your premises, the building itself is usually the landlord's to insure, and the lease usually sets this out.

Workers compensation for cafe staff

Workers compensation is designed to cover your workers if they are injured at work. It is required where workers fall within the relevant state or territory scheme.

Does cafe insurance cover a coffee machine breakdown?

A coffee machine breakdown may be covered where your policy includes machinery breakdown. On upcover's restaurants and cafes page, machinery breakdown is described as "a benefit under Business Pack or Commercial Property Insurance. It may respond to sudden breakdown of insured machinery."

Machinery breakdown is commonly an optional section, so a standard business pack may leave it out. The section is designed for sudden and unforeseen breakdown, such as an electrical or mechanical failure. Wear and tear and gradual deterioration are generally excluded.

Many cafes lease or rent the espresso machine from a coffee supplier. In that case, the supply agreement may say who insures the machine and who pays for repairs. Whether your policy responds to equipment you don't own varies between policy wordings, so always check with your broker or the team at upcover.

Does cafe insurance cover stock spoilage?

Stock spoilage may be covered where your business pack includes a deterioration of stock section. This optional section is designed to cover refrigerated stock, such as milk, cakes and prepared food, that spoils after a fridge or freezer breaks down. Some policies also extend it to a power failure.

Which events count and the specified limit for spoilage vary between policy wordings, so always check with your broker or the team at upcover.

A breakdown that closes the cafe may also bring lost income into play. Business interruption is designed to help cover lost income or ongoing costs, such as rent, when an insured event stops you trading. upcover's guide to business interruption insurance explains how it works.

Who covers the glass shopfront of a cafe?

Your lease usually sets out who is responsible for the shopfront glass. Many retail leases make the tenant responsible, which brings the glass section of a business pack into focus. Glass cover is designed to cover accidental breakage of windows, doors, display cabinets and mirrors, subject to the policy terms.

For a cafe, the glass often includes the front window, a glass door and a refrigerated display cabinet. Cover for display cabinet glass and signwriting varies between policy wordings, so always check with your broker or the team at upcover.

What insurance do councils ask for before footpath dining?

Councils commonly ask for public liability insurance before they approve tables and chairs on the footpath. Some councils set a dollar amount and ask to be noted as an interested party on your policy.

A certificate of currency is a document from the insurer confirming your policy is in force on the date it is issued. upcover's guide explains what a certificate of currency is. Council requirements change, so check your own council's current permit conditions before you apply.

Does cafe insurance cover takeaway food and food poisoning claims?

Claims about takeaway food commonly fall under products liability, the part of public and products liability designed for products you sold. If a customer alleges that a takeaway sandwich made them ill, products liability may respond to the claim, subject to the policy terms.

Catering, market stalls or delivering food off-site may be treated as separate activities. Telling the insurer about them when you arrange cover means the policy schedule reflects what the cafe actually does.

Cafe setups and questions to ask

What might cafe insurance not cover?

Exclusions commonly include, but are not limited to:

• Wear and tear: gradual deterioration of equipment and fit-out is generally not an insured event
• Breakdown without the section: mechanical or electrical breakdown of the coffee machine or fridges where machinery breakdown is not selected
• Spoilage without the section: spoiled stock where deterioration of stock is not selected
• Theft without forced entry: theft sections are commonly designed around forced or violent entry to the premises
• Injury to your own workers: generally sits with workers compensation, not public liability
• Flood: some policies exclude flood or make it optional
• Money limits: cash on the premises and in transit is typically covered up to stated limits
• Activities not disclosed: trading not described on your schedule, such as off-site catering
• Employee theft: may sit under a fidelity or crime section, designed to cover losses from employee dishonesty, rather than the standard theft section

Important: This list is not exhaustive. Exclusions vary between insurers. Always refer to the policy wording and its terms and conditions for the exclusions that apply to you.

What do claims look like for cafes?

The two examples below come from upcover's restaurants and cafes page. The first is a claim made against the business by a customer. The second is a claim on the cafe's own business pack for stolen cash.

Hypothetical example: customer injury claim

A staff member spills a hot drink onto a customer while moving through a crowded service area. The customer alleges burns and ongoing discomfort, then seeks compensation for treatment costs and related financial loss.

How cover may respond: Public Liability insurance is designed to cover third party injury claims and defence costs arising from your business activities.

Hypothetical example: stolen money

After breakfast service, the team prepares cash takings for deposit while the venue resets for lunch. Before the deposit is completed, an unknown person enters the premises and steals the cash, creating an immediate shortfall in cash available for day to day operating expenses.

How cover may respond: Money Cover is a benefit commonly included under Business Pack Insurance. It is designed to cover loss of business money while at the premises, in transit, in a locked safe or strongroom, or in the custody of an authorised person.

Important: Claims scenarios are hypothetical examples only. Cover is always subject to policy terms, conditions and exclusions. Policy wordings may also vary between insurers. Always refer to the policy wording and its terms and conditions for details.

When to notify your insurer and make a claim

If you're concerned about a particular customer service or experience, you can always consider telling your insurer as soon as you become aware of an incident, complaint or circumstance that could lead to a claim. You don't need to wait for a formal demand. Also keep in mind that notifying of a claim late may affect your claim.

You can start a claim through the make a claim page. Admitting liability, incurring costs or agreeing to a settlement before you notify your insurer may affect your claim. Starting a claim does not confirm that your claim is covered; your insurer assesses it under the policy terms, conditions, exclusions and limits.

How much does cafe insurance cost?

Cafe insurance cost depends on the covers and limits you choose and the cafe itself. Common factors include turnover, staff numbers, location, the value of contents and stock, and the public liability amount your lease or council permit sets. Optional sections, claims history and your excess, the amount you pay towards a claim, also play a part.

upcover's guide to how much restaurant and cafe insurance costs covers pricing for cafes in more detail.

How upcover can help

upcover arranges public and products liability and business pack insurance for cafes. upcover works with 80+ insurance partners and can arrange quotes from a range of insurers.

• 70,000+ businesses covered
• 4.9/5 customer rating
• Certificate of currency available once your policy is confirmed

Council or landlord asking for a certificate of currency? Get a quote for cafe insurance through upcover.

Frequently asked questions

What insurance does a cafe need in Australia?

Workers compensation is required where cafe staff fall within the relevant state or territory scheme. Many cafes also arrange public and products liability and a business pack. Leases and council footpath dining permits commonly ask for public liability.

Is public liability insurance compulsory for a cafe?

Public liability insurance is not a general legal requirement for cafes in Australia, but landlords, shopping centres and councils may set their own insurance conditions. Brisbane City Council, for example, asks for $20 million public liability for a footpath dining permit.

Does cafe insurance cover a broken coffee machine?

A broken coffee machine may be covered where the policy includes machinery breakdown, which is commonly an optional section. Machinery breakdown is designed for sudden breakdown of insured machinery, while gradual wear on the machine is generally excluded.

Does cafe insurance cover food that spoils in a power outage?

Spoilage may be covered under an optional deterioration of stock section. Some policies limit it to fridge or freezer breakdown, while others extend it to a power failure. The events covered and the specified limit vary between policy wordings, so always check with your broker or the team at upcover.

How much public liability does a cafe need?

The amount is commonly set by your lease, shopping centre or council permit. Brisbane and Sunshine Coast councils ask for $20 million for footpath dining. An upcover representative or a broker can talk through what those limits mean for your business.

‍

_{The information in this article is general information only and does not take into account your objectives, financial situation or needs. Lease conditions and council permit requirements are set by landlords and councils and can change, and policy sections and exclusions vary between insurers. Before deciding whether a product is right for you, read the policy wording and its terms and conditions. upcover Pty Ltd ABN 17 628 197 437 is a Corporate Authorised Representative (CAR 1299211) of Experience Insurance Services Pty Ltd ABN 41 657 596 506, AFSL 539078. upcover arranges insurance products with selected insurers and underwriters and does not compare all general insurers or insurance products available in the market.}