When you own a business, you’re probably just as worried about maintaining your future income streams as you are concerned about protecting your existing investments.
Businesses don’t spring up overnight, and business owners sometimes spend years building up the resources they need to procure the right space, the right equipment, and the right level of inventory. Perhaps nowhere is this more true than the restaurant industry.
When it comes to restaurant insurance, there’s much more to think about than a grease fire or a break-in. Commercial restaurant insurance means making decisions about food liability insurance and a policy for restaurant employees — all while keeping the restaurant insurance cost at the top of mind.
"What Type Of Insurance Does a Restaurant Need?"
When it comes to business insurance, you may not want to hear “it depends,” but there’s no blanket policy that’s going to work for every business, even in the same industry, especially if your restaurant is on wheels in the form of a food truck.
The same is true for restaurant insurance, although there are six categories of coverage that you’ll want to consider. At a glance, here are the types of restaurant insurance your establishment may need:
General Liability Insurance
Food Liability Insurance
Alcohol Liability Insurance
Workers’ Compensation Coverage
Commercial Auto Coverage
Restaurants typically need several types of insurance to protect their business, assets, and employees. The specific insurance coverage a restaurant needs can vary depending on factors such as its size, location, and the services it offers. Get a free online quote in minutes. Here are some common types of insurance that restaurants should consider:
Commercial Property Insurance: This insurance covers damage or loss of the restaurant's physical assets, such as the building, equipment, furnishings, and inventory. It can protect against events like fire, theft, vandalism, and natural disasters.
Business Owners Policy: This insurance policy designed for small to medium-sized businesses, including restaurants. A Business Owners Policy typically combines several essential insurance coverages into a single package, making it a cost-effective and convenient solution for restaurant owners. It often includes the following key coverages: General Liability, Commercial Property, Business Interruption and more.
General Liability Insurance: General liability insurance protects the restaurant from third-party claims for bodily injury, property damage, or personal injury that occur on the premises. It can also cover legal expenses in case of lawsuits.
Workers' Compensation Insurance: If your restaurant has employees, workers' compensation insurance is typically required by law. It provides benefits to employees who are injured on the job and helps protect the restaurant from legal liabilities related to workplace injuries.
Commercial Auto Insurance: If the restaurant owns vehicles for deliveries or other business purposes, commercial auto insurance is essential to cover accidents and liabilities associated with those vehicles.
Liquor Liability Insurance: If your restaurant serves alcohol, liquor liability insurance is crucial. It provides coverage for legal claims related to the actions of intoxicated patrons, such as accidents or injuries they may cause.
Business Interruption Insurance: This insurance can help cover lost income and extra expenses if your restaurant is forced to close temporarily due to a covered event, like a fire or natural disaster.
Employment Practices Liability Insurance (EPLI): EPLI protects your restaurant from claims related to employment practices, such as discrimination, harassment, wrongful termination, or other employment-related disputes.
Cyber Liability Insurance: In the digital age, restaurants need to protect themselves from data breaches and cyberattacks. Cyber liability insurance can help cover the costs associated with data breaches and cyber incidents.
Umbrella Insurance: Umbrella insurance provides additional liability coverage that goes beyond the limits of your primary liability policies, offering extra protection in case of large liability claims.
Food Contamination Insurance: This coverage is essential for restaurants, as it can protect you in the event of food borne illness outbreaks or contamination of your ingredients.
Equipment Breakdown Insurance: Restaurants rely heavily on kitchen equipment. Equipment breakdown insurance covers the cost of repairing or replacing vital equipment, such as ovens and refrigerators, in case of mechanical failures.
On average, restaurant insurance typically ranges between $1,000 and $12,000 a year, which breaks down to roughly anywhere from $80 to $1,000 every month. Restaurant insurance cost for you will depend on the specifics of your restaurant and your insurance provider.
Restaurant insurance cost will be dependent on how big your restaurant is, how many employees you have, and the different levels of coverage you elect to enroll in.
In most cases, a Business Owners Policy (BOP) can cost anywhere from $80 to $100 a year, but those are just the basic elements of coverage you’ll need. For many restaurants, each of the coverage plans listed above is a necessity, which will raise the overall cost of your coverage.
Remember, it’s never a good idea to set it and forget it. Insurance of any kind can become an out-of-sight, out-of-mind expense, which can lead to overpaying or not fully understanding your coverage limitations.
Instead, make it a point to review your restaurant insurance policy every year and shop around for cheaper coverage or discount opportunities. Schedule your free consultation today.