We asked Andrew Petronis from Canadian Insurance Brokers Inc. to help our students self navigate into the correct insurance package for their coffee business. We hope this will help you to avoid the most common mistakes when going through the process of opening your cafe.
Question: What common misconceptions do clients have when they come to see you?
Answer: A common misconception is that there is a one size fits all policy, and that other similar businesses should have the same coverage and pay the same amount. The reality of it is much different, as there are many variables that make each business unique that will impact their insurance costs, and coverages. One shouldn’t be comparing their insurance with a “friend” or other business owners.
Question: What information do you require a business owner to have , but never have it ready when they come see you?
Answer: The Property Details.
This is always something that takes time to obtain and is something that most business owners do not even know.
Not everyone owns the space their business occupies, meaning that they rent/lease. So, when looking at a prospective space, clients should be getting the property details from the landlord, such as the year it was built, and the subsequent years that it has been updated. Insurers MUST know these details before we can even consider offering terms. These details also greatly affect the type of coverage that will be offered, and how much it will cost.
For example, an older building with Knob and Tube electrical wiring versus an updated location with a new breaker system poses much more of a risk, translating into higher premiums. A formal business plan is also something that the client should have at the ready. Insurance is like applying for a bank loan, and should be treated as such.
Question: Is there a general checklist you go through with a client?
Answer: Yes, we offer everything from Property Checklists, to Safety orientation manuals, even Housekeeping checklists. I have included two examples below to showcase what we’re capable of.
- Q: What kind of experience do you have in this Industry? - (Our job is to present a stable and secure business to our Insurers, the better the picture we paint, the more favorable your terms will be.)
- Q: What are your projected revenues for your first, or upcoming year? (Revenues affect premium drastically, over projecting could increase start-up costs, it's best to be conservative, without undervaluing.)
Question: COVID related to insurance?
Answer: COVID has had massive impacts on insurers around the world, however moving forward should be simple so long as proper procedures are in place, such as cleaning protocols, proper PPE is available to staff and proper training is also a must.
Question: Are you offering policies with conditional proof of covid protocols
Answer: Yes we are, proof of the proper protocols are a must with insurers right now, without them, finding the right insurance is near impossible. We don't have a specific set of protocols, we do however recommend following the Government mandated set below: https://www.canada.ca/en/public-health/services/diseases/2019-novel-coronavirus-infection/guidance-documents/advice-essential-retailers.html
Question: Would you have any further recommendations for a business owner that wants to open a coffee roastery in a commercial space that roasts the beans, ships and sells wholesale instead of a ‘regular’ retail cafe?
Answer: A coffee roastery, however similar it may seem, will have a different set of risks associated with the business. The largest exposure would be the equipment, its maintenance and ensuring all staff can safely operate the machinery. Sales would also differ in that it's likely going to be on a contract basis, which also adds other complex layers, such as shipping and receiving, as well as inventory/stock management.
Question: Is insurance different for each province? Is there something we should be telling people to be aware of?
Answer: Right now, no. Requirements for a shop in British Columbia would be near identical to a shop in Ontario, the only major differentiating aspect might be location (some provinces and areas are more susceptible to wildfires and floods). As well, all prospective owners should follow the provincial COVID protocols, as they could differ between provinces.
Question: Any other comments and or insights you would like to share?
Answer: I'd also like to say that Life Insurance should be strongly considered when starting to open a business, especially if you have partners or are operating your business with your spouse. It can be really difficult for people to go back to work, run, maintain and keep afloat financially if someone close to them had died, especially if they played a large role in keeping the business running. A Lot of overlooked factors, such as taking time off from the business (closing down), paying rent, paying a mortgage or other business loans really add up quickly and can put people into serious debt.
Andrew, thank you for taking the time to answer our questions and to help new prospective business owners through some of their insurance questions and needs!
You can reach out directly to Andrew here:
Andrew Petronis, RIBO Business Development Manager,
Canadian Insurance Brokers Inc.
Tel: (416) 583-5870