What Types of Insurance Does a Sandwich Shop Need?

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What Types of Insurance Does a Sandwich Shop Need?

Sandwich shops serve foods that appeal to many taste buds and preferences. Each sandwich is customizable, making sandwich shops an easy choice for customers needing a quick but healthy meal. Because of the shop’s versatility, it will likely cater to many customers throughout the day, increasing its exposure to risk.

Related: Guide to starting a sandwich shop

What Are Some Risks for a Sandwich Shop?

Sandwich shops are often busy establishments. Risks increase during peak times, exposing the shop to potential losses or lawsuits. Some risks that a sandwich shop is exposed to include the following:

  • Customer injuries
  • Contaminated or spoiled food
  • Employee injuries
  • Sudden loss of business

Customer Injuries

Sandwich shops accommodate customers on-site, so there is a risk that customers could be injured while on business property. Claims for customer injuries create a financial concern because medical bills and settlement payments quickly add up. 

Some of the more common customer injury risks include slips, trips, and falls. For example, slippery floors and cluttered walkways contribute to the slip or fall risk. In particular, bathrooms are hazardous as the floors can quickly get wet. Also, these areas are sometimes subject to neglect when it comes to regular maintenance.  

Customers may also be injured from broken or malfunctioning furniture. For example, unsecured tables and chairs may tip or fall over, causing injury. In addition, children may fall off furniture and injure themselves. More specifically, high chairs with broken lap belts are especially risky.

Contaminated or Spoiled Food

Sandwich shops are responsible for ensuring their food is cooked properly, free of foreign objects, and labeled correctly for allergens. Failing to follow general food safety procedures puts customers at risk of severe illness or injury. For example, food stored at incorrect temperatures may spoil, become contaminated with bacteria, and cause foodborne illness.

Allergens are another food-safety concern for sandwich shops. For instance, cross-contamination may expose customers with food sensitivities to allergens that can trigger a life-threatening allergic reaction. Cross-contamination occurs from poor cleaning procedures, using tools exposed to allergens, and using incorrect ingredients to prepare a sandwich.

Employee Injuries

Employees, too, have several exposures to injury hazards, such as slips, trips, and falls. Further, employees are at risk of back or muscle injuries from lifting heavy objects. 

A kitchen has many tools and equipment that can harm an employee. For example, improper use of sharp knives and deli slicers can lead to cut injuries. Meanwhile, ovens, grills, and stovetops are a burn risk.

Sudden Loss of Business

Sandwich shops may encounter a loss that leads to an unexpected closure. Fires, equipment failure, and water damage are common hazards that cause a store to close for an extended period. The risk with extended closures is that sandwich shops will be interrupted in their normal business flow, jeopardizing income.

The effects of a sudden loss of business may be lessened if the sandwich shop has mobility (i.e., a food truck) or can easily relocate. However, relocations risk the business’s customer base and require starting over with new customers in the replacement location.

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What Types of Insurance Should a Sandwich Shop Consider?

Certainly, sandwich shops have several layers of risk. However, many types of insurance policies can cover each risk. Some of the essential policies that a sandwich shop should consider include the following:

  • General liability insurance
  • Product liability insurance 
  • Workers’ compensation insurance
  • Business interruption insurance

General Liability ­Insurance 

A general liability policy will protect the sandwich shop from bodily injury and property damage claims that occur on-site. For example, a customer injured after sitting on a broken chair may sue the shop for their medical bills. But, a general liability policy covers on-site injuries to third parties. In addition, this policy also covers claims that occur due to the sandwich shop’s operations. Essentially, if a customer is injured or their personal property is damaged due to the shop’s actions (i.e., an employee accidentally causes damage), the policy would cover the liability.

Given that the business may have numerous customers and that trips and falls are common injury claims, a general liability policy is an essential part of the sandwich shop’s insurance package. This line of insurance coverage covers several claim related expenses, including the following:

  • Medical bills
  • Property damage repairs
  • Legal defense costs
  • Settlements

Product Liability Insurance

Product liability insurance for products and completed operations covers claims of bodily injury or property damage that occur because of the products. Primarily, this line of coverage protects the business from claims that result from a customer getting food poisoning from eating contaminated or spoiled food. Further, this coverage is necessary to protect from claims of allergen contamination.

Product liability coverage covers medical bills, property damage repairs, legal defense costs, and settlements. An important note is that because this line of coverage is similar to a premises and operations liability policy, the same insurance company should cover both policies to avoid claim coverage disputes.

Workers’ Compensation Insurance

A workers’ compensation policy covers claims for employee injuries. Following an injury, the employee may incur expensive medical bills and be unable to work while they heal. During this time, the employee loses income yet needs to make payments on their medical bills. Fortunately, a workers’ compensation policy covers many of the employee’s expenses, including

  • Medical bills
  • Lost income
  • Rehabilitation care
  • Disability income
  • Funeral expenses

Many states require that businesses with employees carry a workers’ compensation policy. Although, even if the coverage isn’t required, it is still crucial because it covers the employee, and it also protects the business from potential lawsuits.

Business Interruption Insurance

Business interruption insurance covers businesses for unexpected pauses. Losses and hazards cause unexpected closures that create a break in the revenue stream—a problem that likely leads to financial issues. For instance, fires are a leading hazard that causes extensive damage or equipment breakdown resulting in an extended closure. Fortunately, business interruption coverage provides well-rounded benefits to help small businesses remain steady during a closure. Some of the key coverages include

  • Payment on regular bills and loans
  • Compensation for employee wages
  • Compensation for expected income
  • Coverage for the cost of a temporary relocation

How much does sandwich shop insurance cost?

Each sandwich shop will vary in its insurance needs. For instance, a shop that rents space and has few employees needs less coverage than a shop with many employees and multiple owned locations. As a result, the cost of insurance will vary from one sandwich shop to the next.

Coverage amounts and risk exposures are two aspects directly affecting insurance costs. Insurance companies consider these aspects when writing up a sandwich shop, also referred to as deli insurance, policy. Some factors that influence these two aspects include the following:
– The size and condition of business-owned structures
– Employee training and certification
– Safety precautions
– Food safety protocols
– The number of employees on the payroll 
– Loss prevention measures, such as a fire suppression system
– Any past or current lawsuits or insurance claims

The most effective way to choose the right insurance package for your sandwich shop is to go insurance shopping and contact various business insurance companies for a quote. This way, in addition to comparing costs, you can also compare bundles, discounts, coverage amounts, and benefits.

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