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What Types of Insurance Does an Ice Cream Shop Need?

What Types of Insurance Does an Ice Cream Shop Need?

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What Types of Insurance Does an Ice Cream Shop Need?

Ice Cream Shop Insurance Quotes

Costs for business insurance can vary greatly, and getting insurance quotes from multiple companies is recommended in order to get the best pricing.

Coverwallet and Hiscox offer easy business insurance quotes at affordable prices.

An ice cream shop is a special and familiar place for families, kids, and adults alike. Offering soft-serve, frozen yogurts, ice cream cones, and custards, an ice cream shop does not lack a variety of flavors and textures that appeal to many customers.

Although an ice cream shop is a delight to many, there is the difficult reality that incidents and accidents occur. The hazard of accidents requires that the ice cream shop carry insurance. Accordingly, liability coverage is essential to protect your ice cream shop from experiencing financial hardships.

Related: Guide to opening an ice cream shop

What Are Some Risks for an Ice Cream Shop?

Some risks that an ice cream shop will encounter includes:

  • Equipment failure
  • Customer injuries
  • Robberies
  • Employee injuries
  • Extended closures

Even when precautions are made, accidents still happen, and that is why it is important to have well-rounded insurance policies to protect the business’s finances.

Equipment Failure

Ice cream shops require freezers and refrigerators to keep products from spoiling or melting. For example, broken freezers will cause the ice cream shop’s products to melt, thereby spoiling the store’s inventory. Not only is the product expensive to replace, but the freezers themselves are expensive to repair.

In addition to freezers and refrigerators, an ice cream shop may have other specialized equipment such as soft-serve dispensing machines, blenders, soda dispensing machines, and carbon dioxide tanks. The breakdown of specialized equipment can eliminate the store’s product availability, causing the shop to lose valuable income.

Customer Injuries

Customer injuries occur from slips, trips, and falls, especially during peak hours when customers crowd inside the building. In addition, ice cream shops with indoor or outdoor seating have an added liability risk resulting from injuries due to broken or unstable furniture.

Glass cases, doors, and sliding windows are frequently used in an ice cream shop to display the products. These glass fixtures should be inspected for cracks and replaced if a crack is found to prevent cut injuries from the broken glass.

Illness is another risk to customers. Food products contaminated by bacteria and foreign particles can cause serious illness. Consequently, some of the more expensive claims result from customers who consume contaminated food.


Ice cream shops regularly transact with cash. By the end of the day, the store will have accumulated a considerable amount of money, making the store a target for robberies. Further, robberies can occur at booths and ice cream carts set up at fairs, farmer’s markets, parades, and sporting events.

Another form of theft that happens is due to employee dishonesty. Vetting employees and setting up standards for dealing with cash helps reduce internal financial loss; nonetheless, insurance can help replace cash if theft occurs.

Employee Injuries

Employees can suffer injuries from slips, trips, and falls, especially during peak times when regular cleaning and maintenance may be skipped. Another injury risk is back strains from lifting heavy objects. Also, employees may cut themselves using knives to cut open boxes or slice fruits. Likewise, electrical shock from malfunctioning equipment can injure an employee, particularly if an untrained employee attempts to fix a broken machine.

Extended Closures

Closures and disruptions in business are mainly harmful during peak seasons. It is not uncommon for a shop to make most of its annual sales during the peak season. The breakdown of refrigeration equipment and substantial losses to the building can cause an interruption in the business. Although relocation may be an option, many of the ice cream shop’s customers are repeat clients, resulting in a loss of clientele following a relocation. Another interruption happens when there is a delay in the supply deliveries. Without the necessary inventory, the business is at risk of income loss.


What Types of Insurance Should an Ice Cream Shop Consider?

Insurance is an essential aspect of any business plan as it offers protection for the business’s assets and financial well-being. An ice cream shop should consider adding the following insurance policies to its business plan:

  • Equipment breakdown
  • General liability – premises and operations
  • Crime insurance
  • Workers’ compensation
  • Business interruption

Equipment Breakdown

The ice cream shop’s refrigeration equipment will be one of the larger assets needing coverage. Walk-in refrigerators, freezers, batch freezers, and display fridges are expensive to replace, and without insurance, the business pays for replacements on its own. A typical property insurance policy excludes coverage for sudden breakdowns and mechanical failures,  which is why adding equipment breakdown coverage is essential. This policy covers the cost of replacing equipment, spoiled food, and lost income.

Equipment breakdown coverage protects business equipment from otherwise excluded perils, such as:

  • Mechanical failures
  • Sudden breakdowns
  • Losses due to electrical arcing

This policy does not cover gradual wear and tear on equipment; rather, this policy insures the sudden breakdown or failure. Ideally, the same insurance company covers both property damage and equipment breakdown to avoid claim settlement disputes. Regardless, equipment breakdown coverage is a beneficial policy for an ice cream shop, whether covered by the same company or a different one.

General Liability Insurance – Premises and Operations

General liability insurance coverage protects the business from lawsuits involving bodily injury or property damage that occurs on the business property or due to the business’s functions. For example, a general liability policy insures claims for injured customers who slip on a wet floor. Similarly, this policy also covers claims resulting from foodborne illnesses, such as ice cream contaminated by bacteria.

Coverage for liability exposures is a central policy to have in your insurance portfolio as it offers protection for expensive claims. This policy includes coverage for expenses including:

  • Medical payments
  • Property damage repairs
  • Legal defense fees
  • Settlements

Food Contamination Insurance

Ice cream shop owners can purchase insurance coverage to protect themselves from food contamination. Regardless of whether you are making your own ice cream or purchasing it from a manufacturer, should your business be impacted due to food contamination, there will be real costs for cleaning equipment, replacing spoiled food, and advertising to announce the reopening of the store. 

Crime Insurance

In a perfect world, the business will never need to use its crime insurance policy. However, if the unfortunate happens and an incident, like a robbery, occurs, this policy is helpful because it insures cash. A standard commercial business insurance policy does not insure money or securities, or if it does, it’s a minor amount. Therefore, additional insurance for cash is important to consider.

A crime insurance policy covers the company against losses, including fraud, forgery, theft of cash, and employee dishonesty. In particular, crime insurance is helpful for ice cream shops that serve products offsite as the policy insures money both on and offsite.

Workers’ Compensation Insurance 

An ice cream shop with employees will benefit from a workers’ compensation policy because it pays for expenses following an employee’s injury. Without this crucial coverage, the ice cream shop could be held responsible for the medical bills and lost income for the injured employee.

A workers’ compensation policy offers employees coverage for expenses involving:

  • Lost income
  • Medical bills 
  • Ongoing rehabilitation care
  • Disability income
  • Legal expenses
  • Funeral expenses

A shop with regular maintenance and cleaning can prevent most injuries. However, if an incident occurs, the workers’ compensation policy covers the employee’s expenses and protects the business from lawsuits.

Business Interruption

Business interruption insurance is typically an additional coverage added to a business owner’s policy. This line of insurance offers coverage for expenses resulting in a loss of income, employee wages, and payment on regular bills and loans while the business is closed.

During normal operations, the ice cream shop’s income is based on consistent, repeat clientele, which will be altered due to the new location. So, although a temporary relocation is possible (and a business interruption policy helps cover the costs of moving to a temporary relocation), the business may still experience a reduced income. Nevertheless, business interruption covers lost revenue, making this line of insurance significant—especially during the peak season.

How Much Does Insurance Cost for an Ice Cream Shop?

The cost of insurance varies depending on the unique needs of your ice cream shop. Coverage amounts and risk exposures are the key factors in determining the annual premiums. Ideally, bundling policies with the same company reduces claim disputes, simplifies renewals, and is recommended to reduce insurance costs.

Risk factors that influence insurance prices include:

  • The size and condition of the ice cream shop’s building
  • The condition of transportable equipment (i.e., ice cream stands)
  • The number of employees on the payroll
  • The security and safety precautions in place to reduce theft
  • Any current or past insurance claims and lawsuits

Ice cream shop insurance is a proactive way to protect your business’s assets and finances, making it an essential part of any business plan. Indeed, pricing is important, so, on a final note, the best way to verify your insurance rate is reasonable is to compare the types of coverage and obtain multiple quotes from different insurance companies.

What Types of Insurance Does an Ice Cream Shop Need?

What Types of Insurance Does an Ice Cream Shop Need?

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