I run a small coffee roasting operation on the near west side, about 6 employees and a 2000 sq ft space. I budgeted around $400/mo for general liability based on what I paid at my old place in the suburbs. My broker just quoted me $1100/mo. Apparently the roof is older, there's a residential unit above us, and commercial cooking equipment pushes it into a different risk category. I feel like an idiot for not factoring this in before signing the lease. Anyone else get blindsided by Chicago insurance costs?
Insurance
I underestimated the cost of insurance for my Chicago business
The residential unit above you is probably the killer. Even if it's empty, insurers see fire risk to tenants. Does your lease make you responsible for insuring the whole building or just your unit? That distinction might change your options.
roof age is huge too. i got quoted double just because my flat roof was 20 years old. ended up reroofing and premium dropped 30%. not saying that's your situation but worth asking the broker what specific factors are driving the number.
Broker said the roof and the cooking equipment are the two big ones. We do have a separate lease for just our unit, so I think we're only insuring our space. But they want a commercial kitchen endorsement because of the roaster and the afterburner.
Not the afterburner! I had to explain to my landlord what that even was. My premium went from $800 to $1400 when I moved from a shared kitchen to my own spot. Turns out the fire suppression and ventilation specs really matter. Did you get multiple quotes?
shop around. the first quote is almost never the best one for small commercial. i use a guy in logan square who works with a lot of food businesses, happy to pass the name along if you DM me.
also check if your building's construction is 'masonry non-combustible' vs 'joisted masonry' or something. Older building stock on the near west side can fall into a worse class. My broker found a carrier that classified my 1920s building differently than the first one did, and it saved me a couple hundred a month.
1100/mo on 6 employees? honestly that doesn't sound crazy for roastery with cooking equipment in a mixed-use building. i know coffee shops paying more. but yeah still worth fighting for a better number.
one thing to compare carefully: does the quote include business interruption coverage? cheap quotes sometimes strip that out. for a roastery where one electrical fire could shut you down for months, that's the piece you actually need.
Good call on BI coverage. I just pulled the quote and it's there but with a pretty high deductible. I'm going to get two more estimates this week. Tuesdaystreet, I'll take that name if you're serious.
let us know what the second quote comes back at. curious how much is just the residential unit overhead vs the kitchen equipment.
and don't beat yourself up, most people wildly underestimate insurance when they mvoe into a bigger or older space. the suburban rates were probably subsidized by lower risk profiles.