So, your friends and family have been raving about your cooking since you were old enough to hold a spatula. Or maybe you’ve just graduated from cooking school with years of restaurant experience under your belt. Or you could be following a lifelong dream after years of planning, saving, and a worrying about all the small details. Now you have your own place to share your food with the world! (Or at least your community.)
However, there’s one very important detail to keep in mind before you open your doors: restaurant insurance.
Why Do I Need Restaurant Insurance?
The restaurant industry faces tons of hazards every day, from hot liquids to live stovetops to fast-paced services and slippery floors – all while trying to make sure that your food is safe and ready to serve! While these incidents may be something you worry about and actively try to prevent on a daily basis, accidents happen. So, you need a way to protect your customers, your employees, and your business.
So, What Kind of Insurance Do I Need for a Restaurant?
Whether you’re opening a new franchise location or a small eatery for the first time, there are standard insurance policies that every restaurant owner should consider:
General Liability
General liability can help you if there’s an accident that causes bodily harm or property damage to your guests. It’s the part of your policy that will cover any medical bills or legal settlements should a customer decide to sue for injuries sustained on your property. It can also help you cover claims of slander or libel (a.ka. personal injury.) Depending on the policy, your general liability coverage can cover other legal costs brought against your business, including attorney fees and court costs.
Worker’s Compensation
Your cooks, cashiers, and waitstaff (if you have them) are standing, walking, and running around hotplates, slick surfaces, and other people all day to make your customers happy. Even if they’re trying their hardest to stay safe, accidents happen. Not only do they need to trust you to report any injury they may receive, but you also need to be able to help them recover. And worker’s comp is the way to do just that – it covers your employee’s medical expenses and a portion of their lost wages while they get their necessary R&R.
Business Property Coverage
Also called “Commercial Property Insurance,” this part of your restaurant insurance policy can help you repair any damage done to your building’s physical structure. It can help you take care of damages caused by fire, lightning (which can be useful if it decides to fry your industrial fridge), windstorms, hail, and vandalism. Make sure you read your policy to see what is and is not covered.
For restaurants, a lot of insurance carriers will also include endorsements like Food Spoilage coverage (which we’ll get into later). So, it’s important to talk to your agent about what kind of coverage is offered in your property coverage for a restaurant-specific plan.
Our agents are professionals in comparing restaurant plans so that you can easily get the best policy to cover your distinctive dining company. Call 770.497.1200 to talk to an agent and get free restaurant insurance quotes tailored to your business.
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Restaurant Insurance Endorsements
Different insurance carriers will handle restaurant-specific coverage in different ways, so you should also keep an eye out for these endorsements in your General Liability or Property Liability restaurant insurance coverage.
Food Spoilage & Contamination Insurance
Managing a lot of food can mean a lot of worry if something happens to your refrigerated food supply. Luckily, Food Spoilage insurance can help cover the cost of any food lost if your refrigerator or humidity control unit is out of commission for an extended period of time. So, if your restaurant happens to be the victim of a citywide power outage, your insurance can help you clean out the spoils and restock your shelves when it’s all over.
Similarly, food contamination coverage can help you recover funds for any food you have to throw out because of (you guessed it) contamination of your food supply. Again, different insurance carriers handle this coverage in different ways, so check with your insurance agent to see if this is already included in your property insurance, if it’s an endorsement you should include, or if you need a separate policy to handle spoilage, contamination, or both.
Liquor Liability Coverage
This one isn’t just for bars. If you serve liquor at your restaurant, in addition to your liquor license, you should consider Liquor Liability coverage. This type of insurance coverage can help cover damages and legal funds if one of your patrons has a little too much fun at your restaurant. Businesses have been sued for alcohol-related incidents ranging from bar fights to bad falls to car accidents. So, in addition to teaching your servers and bartenders the signs that someone has had too much to drink, it’s a good idea to have liquor liability in case a liquor-related can’t be avoided.
Employee Dishonesty Coverage
Unfortunately, the restaurant industry has a pretty high turnover rate, especially for waitstaff. Sometimes this is because a good server or host decides to leave, but sometimes it’s because of an employee who tells a little more than a white lie. Employee Dishonesty Insurance, which can also be included in Business Crime insurance, can help protect your business’s funds should an employee or former employee steal from your register. It can also help cover funds lost if an employee misuses your funds, forges a check, steals inventory, or finds a way to steal funds electronically.
There are some other little extras that you may want to include in your restaurant’s insurance coverage through an endorsement or through a separate plan, depending on the particular risks your restaurant faces. Some policies to consider are:
- Interruption Insurance – Covers your lost income if your business has to shut down for repairs due to a covered loss.
- Signs & Advertisement Insurance – To help you cover anything from a rebranding emergency to legal fees while defending any misleading or false advertising.
- Cyber Liability Insurance – For even more protection of your digital assets and customer information. Plus, this piece of policy can help you investigate a breach and notify your customers.
- Commercial Auto Insurance – If you cater events or deliver food.
- Equipment breakdown – To help repair or replace any mechanical mishaps or equipment that’s down for the count.
- Umbrella liability– Provides extra liability coverage.
Finding insurance coverage for a restaurant can be tricky, especially when carriers offer so many different restaurant insurance bundles! That’s why our insurance professionals are always here to help you get the amount of coverage you need within your business’s budget. Call 770.497.1200 or fill out our online form for a free quote on the insurance plan that can help you run the restaurant of your dreams. Bon Appetit!
Sources:
https://www.investopedia.com/terms/l/liability_insurance.asp
https://www.thebalancesmb.com/liability-coverage-and-the-duty-to-defend-462618