What a lemonade stand can teach about insurance

It’s heart-warming to see the initiative of young children who set up a front-yard lemonade stand to raise a little money, especially those kids whose goal is to donate proceeds to help a cause like childhood cancer — turning lemons into lemonade, so to speak.

A child’s entrepreneurial venture can provide a great teaching moment for parents about the challenges and needs that many small business owners face, whether it’s about inventory control or managing their finances.

While a lemonade stand won’t need insurance, the day may come when your child wants to get more serious about opening a small business or food truck, so take the opportunity to educate him or her about this important aspect, too.

Why might a food vendor need insurance? It offers protection for unfortunate events like a slip and fall injury, or can pay medical bills for someone who gets sick from spoiled food, for example.

Often, vendors are required to provide proof of insurance to event organizers or owners of the premises where they set up. The types of coverage that are most common include:
  • General Liability – Protects the vendor in the event of a successful lawsuit that results from their business operations.
  • Property or Inland Marine – Covers inventory held in storage or items used that are moved to several locations.
  • Workers’ Compensation – Each state has different requirements for work comp, so check with your independent agent to learn about your specific needs.
  • Spoilage – Can protect merchandise that’s spoiled because of a power outage or refrigeration equipment malfunction.
Talk to your child about the various aspects of operating a small business, including insurance. When their zest for selling lemonade sours and they devise grander plans, they’ll be able to squeeze the most out of life.