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From Kitchen to Table: Why Restaurant Business Insurance is Essential for Owners

From Kitchen to Table: Why Restaurant Business Insurance is Essential for Owners

Are you a restaurant owner? Or in the food and beverage business? Are you aware of the variety of risks your small business faces? Restaurants face a variety of risks because of the nature of the business. One of your employees can slip and fall on wet floors or accidentally cut themselves. A patron can become ill after eating your food. A natural disaster can destroy your building and leave you unable to operate. Restaurant business insurance can protect you in all of these circumstances—so you must be prepared.

What is Restaurant Insurance?

Restaurant insurance is a group of insurance policies designed to protect restaurants and other food service businesses in the case of property damage, bodily injury, customer illness, etc. 

Who Needs Restaurant Insurance? 

Any business that sells or serves food should consider the appropriate insurance coverage.

  • Fast Food Restaurants
  • Fine Dining Restaurants
  • Delicatessens
  • Coffee shops
  • Ice cream shops
  • Doughnut shops
  • Food trucks
  • Caterers
  • Cafes
  • Bars
  • Bakeries
  • Pubs
  • Bistros
  • Night clubs

The Types of Restaurant Insurance Coverage You Need

Because a restaurant typically owns a physical location, hires employees, and handles food, a variety of coverage options should be included as part of your policy.

General Liability Insurance

General Liability Insurance is also referred to as "Slip-and-Fall" coverage and referred to as restaurant liability insurance in the industry. General liability insurance offers finanical protection by protecting your business in the case of third-party claims resulting from:

  • Third-party bodily injury: If a customer slips and falls on a wet bathroom floor, your insurance company can cover the cost of their injury (i.e. medical expenses, lost wages, etc.).
  • Third-party property damage: One of your new waiters accidentally pops open a champagne bottle and the alcohol gets all over your customer's handbag. Your insurance company can cover the cost to replace her bag if you have general liability insurance.
  • Advertising injury: A competitor claims that your advertising damaged their reputation and they sue you for slander. Your insurance company will help cover the cost of the lawsuit, legal fees, any necessary settlements or judgments.

Commercial Property Insurance

Commercial Property Insurance protects your building from damage from fire, theft, burglary, and some natural disasters. If a fire breaks out in your kitchen and it must be repaired, this insurance can help cover the costs. If you live in an area prone to flooding, consider adding a flood insurance policy.

Business Income and Extra Expense

Business income and extra expense—also referred to as business interruption insurance—goes hand-in-hand with commercial property insurance. If your property is damaged and you can't remain open during repairs, business income and extra expense can help cover some of your operating costs (rent, bills, payroll, taxes, etc.).

Business Owners' Policy

A business owners' policy typically combines commercial property insurance, general liability insurance, and business interruption insurance to create a more affordable policy. It's typically offered to small restaurants vs. large chains. Some insurers will also include other industry-specific coverages.

Workers' Compensation Insurance

Workers’ compensation insurance covers the cost of medical expenses, lost wages, lawsuits, and settlements if one of your employees gets injured or becomes ill on the job. For example, one of your chefs accidentally starts a grease fire and gets burned. Workers' compensation will cover their medical bills and lost wages until they're able to return to work.

Product Liability Insurance

Product Liability Insurance—also referred to as food liability insurance—should be considered a necessary insurance in the restaurant industry. Why? If you serve food, your restaurant is at high risk of a customer becoming ill from food poisoning. Even if your restaurant isn't at fault, the injured party could sue you to cover their medical expenses. Product liability can help protect you from these costly claims. 

Liquor Liability Insurance

If you serve alcohol, your business needs Liquor Liability Insurance. Why? If you serve alcohol and a patron becomes inebriated, you can be held liable for that person's actions. Liquor liability insurance protects you if the customer causes property damage or bodily injury to another person. If they leave your restaurant and get in a drunk-driving accident, your business and bartender can be held liable. Don't skimp on this important liquor liability coverage.

Other Insurance Coverage to Consider

Some small businesses might want to consider these insurance policies (or see if they can be included in a business owners' policy).

  • Equipment Breakdown Coverage: If your furnace, A/C unit, boiler, or even kitchen equipment such as refrigerators are damaged or breakdown due to an electrical surge, this insurance policy helps pay for repair or replacement—and in some cases lost profit. 
  • Garage Keepers Insurance: Does your restaurant offer valet parking? If your valet damages a customer’s car, this coverage can help pay for the physical damage.
  • Commercial Auto Insurance: If your restaurant also operates a food truck or catering truck, you need commercial auto insurance to protect this asset in case of an accident or damage. 
  • Employment Practices Liability Insurance: This covers your business if you are accused of harassment or discrimination. It is excluded from general liability coverage. 
  • Professional liability insurance: If you teach cooking classes or offer a "professional service" you need professional liability insurance in case something goes wrong when a customer takes your expert advice.

Why Restaurant Business Insurance Is Important

For food business owners, securing a comprehensive restaurant insurance policy equals peace of mind. Running a restaurant involves inherent risks, from property damage to liability issues. A dedicated restaurant insurance policy mitigates these risks, tailoring coverage to the unique challenges of the food industry.

Restaurant insurance coverage provides a safety net for business owners that protects against unforeseen circumstances, such as:

  • Property damage
  • Food contamination and spoilage
  • Liquor liability
  • Employee accidents and worker's compensation
  • Data breaches and cyber-attacks
  • Discrimination or wrongful termination complaints
  • Equipment breakdown
  • Loss of income from utility interruption

These are just a few of the possible ways financial protection becomes invaluable. In the realm of business insurance, restaurant insurance is a strategic investment in the longevity and resilience of a restaurant business. The right insurance gives restaurant owners the freedom to focus on running a successful and thriving restaurant.

How Much Does Restaurant Insurance Cost? 

Restaurant liability insurance can start as low as $39 a month for basic general liability. The cost of business insurance for restaurant owners varies considerably, depending on the following variables:

  • The number of locations
  • Whether or not you own vehicles
  • The type and age of your property
  • Whether or not you sell alcohol
  • How long you’ve been in business
  • Insurance coverages you choose
  • Coverage levels you have chosen

Other factors may impact the cost of restaurant insurance coverage, even the insurance company you choose. Business insurance for a restaurant is an insurance cost that you cannot avoid, and it can be the difference between operating your business for years to come or losing it completely from one claim. The benefits far outweigh the costs.

Get a Free Restaurant Insurance Quote

Owning and running a restaurant business means juggling several tasks daily. Don’t let your restaurant insurance be one of the things causing you stress. Putting the right coverage in place will reduce stress and worry down the road, allowing you to focus on the operation of your food business.

Tivly specializes in helping restaurants find competitive rates from leading carriers. Complete the form above and a representative will connect with you soon to help you get a quote for your restaurant. Or, give us a call at 877-907-5267.

  General Liability for Injury:   YES     (Included on Business Owners Policy)
  Property Coverage:   YES     (Included on Business Owners Policy)
  Payment Options:   YES     (Pay in Full OR Payment Plans)
  Low Down Payments:   YES     (Flexible Payment Options)
  Business Income Coverage:

  YES     (Lost Income from Natural Disaster)

 Food Spoilage Coverage:  YES


Reviewed By: Sarah Reid, Licensed Agent

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