Ice Cream Parlor Insurance

Staying Cool: The Basics of Insuring Your Ice Cream Parlor

Tom Senkus | December 5, 2019
Insuring an ice cream parlor

Your ice cream parlor not only serves delicious frozen treats to your hungry customers, but is part of your satisfying livelihood. With this in mind, you know that paying attention to your customers' needs and providing a welcoming environment is important to your continued success.

However, what happens when something goes wrong for your business? Whether you’re faced with a claim filed against you by a customer, an employee slips and falls in your kitchen, or a malfunctioning freezer melts your inventory, having the right small business insurance in place can keep your business afloat. 

As with any form of business insurance, it pays to have the qualified advice of an expert. That’s why independent insurance agents are here to help guide you through insuring your ice cream parlor. From finding the cheapest policy to explaining the fine print in an unbiased manner, insurance agents can help you concentrate on doing what you do best: serving the sweetest treats to your customers. 

Does My Ice Cream Parlor Need Insurance?

With the average claim being filed at $15,000 per instance, having insurance in place for your ice cream parlor before something happens is a no-brainer. One claim can effectively destroy years of hard work, forcing you to close your doors or melt the profits your business deserves. For those without insurance, a claim means that you’ll have to pay legal fees and damages out of pocket. So in essence, having insurance in place actually serves as a way to buffer your ice cream parlor against damages. 

Bear in mind that if you’re still not totally convinced you need an insurance policy, your landlord and your state may have other ideas. As part of many contractual agreements written into leases, landlords usually require businesses to have coverage limits met before officially conducting business. Furthermore, most states require businesses to have a workers’ compensation policy in place, so it’s nearly impossible to operate an ice cream parlor without some type of coverage. 

If you’re still on the fence about how much insurance you need and whether you have risks you may be unaware of, speak with an independent insurance agent. They can give you unbiased advice to help your ice cream parlor thrive, while also explaining the fine print among the hundreds of insurers available in your market.

Types of Insurance Policies for Your Ice Cream Parlor

While no two ice cream parlors are the same, they do have a lot in common in terms of basic forms of commercial insurance they need to operate effectively:

Liability insurance provides protection for most claims filed against your business. This can range from an injury on your premises, to a food poisoning incident, all the way to advertising that is perceived as slander by one of your competitors. Whatever the reason, liability insurance serves as a protective barrier to keep your ice cream parlor running without unnecessary litigation.

Next, property insurance for your ice cream parlor helps protect your business from damage to the premises and the properties surrounding your establishment. If a malfunctioning freezer causes flooding and damages the floor of your landlord’s property, property insurance can help cover the cost of replacement. 

Worker’s compensation insurance is mandatory for most ice cream parlors - and with good reason. If a worker has a work-related injury, illness, or other health-related concern, workers' compensation provides compensation to workers during recovery and rehabilitation. And even for your business, having a policy in effect can protect valued employees and get them back working at your ice cream parlor. 

Commercial automobile insurance is also useful for ice cream parlors that provide catering for events, drive mobile food trucks to events like farmers markets, and deliver supplies and inventory. While most typical automobile insurance policies provide some coverage for third-party liability claims, commercial automobile insurance provides more comprehensive coverage if the vehicle is used in a business-related capacity.  

It should be noted that these coverages are usually bundled in a business owners policy (BOP). The advantage of a BOP is that your policies will be cheaper, easier to manage, and have more comprehensive coverage than if you had to choose between separate insurers. If you’re looking for unbiased information to compare insurance policies from different companies, an independent insurance agent is the right way to go. They can break down policy limits, exclusions, and what would happen under certain scenarios so that you gain peace of mind. 

What Is the Cost of Insuring My Ice Cream Parlor?

The average cost of annual premiums for commercial business insurance for an ice cream parlor can range from as low as $300 annually up to $3,000 annually. With an average premium rate at $1,200 per year, protecting your ice cream parlor is more affordable than you may realize. 

NAICS Code for Insurance Costs

Of course, there are a number of factors that influence how your premiums are determined by an insurer. First, there is the classification of the business by industry by the government’s North American Industry Classification System (NAICS) code. NAICS codes are used for insurance companies and a variety of other financially related purposes, such as qualifying for business loans and taxation. Consequently, the NAICS code system is used by your insurance company to compute premiums and risk.

A business may often have a primary NAICS code (the code that best fits your business) and a secondary code (if it has other elements of a second industry). Most ice cream parlors are classified under the primary code of 72, which stands for ‘Accommodation and Food Services.’ However, if your ice cream parlor is engaged in other forms of retail, your business may have a secondary code of 44 or 45, designated under ‘Retail Trade.’ 

If you don’t know what your company’s NAICS codes are, an independent insurance agent can help you determine which NAICS code your cookie shop is classified under. 

Risk Factors for Higher Insurance Premiums

  • Size of premises
  • Condition of the property
  • Business hazards
  • Payroll size
  • Claims history
  • Employment status of employees
  • Number of employees
  • Severity potential

Risk Factors for Higher Commercial Auto Insurance Premiums

  • Driver demographics
  • How and where you drive
  • Type of driving and vehicle
  • Driving record

Reducing the Cost of Insurance

There are a number of ways to reduce your insurance premiums that any cost-conscious ice cream parlor owner should be aware of:

  • Bundled coverage
  • Reduce risks
  • Provide adequate oversight and intensive training
  • Investigate any discount options offered by an insurer

Additional Forms of Insurance for Ice Cream Parlors

Besides the standard types of insurance, you should know that insurance policies are available for any aspect of your business. If you specialize in catering private  events, you will want to invest in umbrella insurance, in case an incident occur that exceeds your policy’s normal limits for the event. Here are some other coverages that you should discuss with an independent insurance agent:

  • Spoilage insurance
  • Food contamination insurance
  • Business interruption insurance
  • Equipment breakdown insurance
  • Cyber liability insurance
  • Employee dishonesty coverage
  • Earthquake insurance
  • Flood insurance
  • Errors and omissions (E&O) insurance
  • Product liability insurance

Benefits of an Independent Insurance Agent

Independent insurance agents have access to multiple insurance companies, ultimately finding you the best coverage, accessibility and competitive pricing while working for you. Find an independent insurance agent in your community here.

Sources © 2020, Consumer Agent Portal, LLC. All rights reserved.

https://www.boltinsurance.com/ice-cream-store-insurance/

https://www.allstate.com/business-insurance/small-business/ice-cream-yogurt-shops-overview.aspx

https://www.fliprogram.com/baked-goods-insurance

https://www.thehartford.com/small-business-insurance/types-of-small-business-insurance

https://www.entrepreneur.com/article/241026

https://www.nfib.com/content/legal-compliance/legal/workers-compensation-laws-state-by-state-comparison-57181/ 

https://www.census.gov/smallbusiness/html/naics.html


© 2020, Consumer Agent Portal, LLC. All rights reserved.

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