Restaurant Insurance

Is Insurance on Your Menu?

What is Restaurant Insurance? 

Insurance is not the most delightful thing to think about when you’re setting up a new business. But plays a vital role to keep risks at bay for you and your business. As a restauranteur you want to provide quality service and food in town. But being a proprietor your priority shouldn’t just end there. Restaurants are also vulnerable to various risks, such as:
  • Food borne illnesses
  • Workplace injuries/ employee-related risks
  • Fire and storm damage
  • Theft
Restaurants do their best to prevent such risks yet it becomes avoidable sometimes. Therefore, restaurant insurance covers you and your business against a multitude of problems. Such as from property damage, client injuries to liability lawsuits.

In this article

Who Needs Restaurant Insurance?

Businesses that serve or sell any form of food or drink need restaurant insurance the most. Therefore, companies that need restaurant liability insurance are:
  • Cafes
  • Bars and pubs
  • Caterers
  • Food truck
  • Hotel
  • Diners
  • Pizzerias
  • Lounges
  • Bakeries
  • Delis
  • Fast food franchises
  • Coffee and gourmet drink shops
  • Breweries

What Does Restaurant Insurance Cover?

The most common list of general policies that restaurant insurance covers are:

Business Owners Policy (BOP)

BOP is a combination of commercial property, business interruption, and commercial general liability insurance. Thus, the insurance covers property damage, third party bodily injury, theft and vandalism.

Worker’s Compensation Insurance

Worker’s compensation insurance covers employees when they face injuries during their course of the work. With Texas as an exception, this policy is mandatory for all other states. It provides coverage for all work-related injuries and expenses such as medical bills, legal fees, and lost wages. For instance, your employee gets injured while taking food out of the oven or slipping down the stairs. Therefore, this policy helps to cover costs incurred against such risks.

Commercial Auto Insurance

Commercial auto insurance ensures to cover medical costs, property damage, and possible lawsuits caused during an accident. Also, Forbes states that online food delivery will soon be a $200 billion industry! Therefore, as many restaurants use vehicles to serve their clients and customers, auto insurance is a must.

Commercial Property Insurance

Commercial property insurance offers coverage for business’s tangible assets against fire, theft or natural disaster. For example, a fire incident in your area destroys your restaurant. This leaves your property completely destroyed. At such scenarios, this policy helps to cover for the damaged property.

Don’t wait until it’s too late! Get your affordable and custom-tailored restaurant insurance policy quote for your business today.

Commercial General Liability Insurance (CGLI)

CGLI covers for any third-party injuries, property damage, unexpected lawsuit, that arise due to accidents. For instance, back in 1993, McDonalds was filed for a coffee lawsuit by a woman who spilled hot coffee on herself and won $2.86 million! Lesson – if you want to protect your business and pocket from such third-party claims, CGLI policy is a must. Also, you can endorse cyber liability insurance to your CGLI policy. As a result, this helps to secure your customer’s sensitive information such as credit card information.

Commercial Umbrella Insurance

Commercial umbrella insurance provides extra limits or extends liability coverages. For instance, at times the primary liabilities policies such as commercial auto, commercial property, and CGLI fail to cover against the third-party claim. In such situations, umbrella insurance provides extra coverage. For example, the chandelier placed at the center of your restaurant ceiling falls. It destroys all valuable contents of the restaurant. Sometimes, commercial property insurance does not suffice to cover all the property damage. Hence, umbrella policy swoops in to cover the remaining cost it incurred.

Product Liability Insurance

If the food products that the business sells, makes someone severely ill, product liability insurance will cover such claims. However, this policy is mainly for business that manufacture or sell products. Cases related to contaminated food served by restaurants occur every now and then. As per Nolo, in 2015, Chipotle was sued for outbreaks of food-poisoning incidents from one of its Mexican restaurants. This incident best exemplifies why restaurant needs to have product liability policy with them.

Liquor Liability Insurance

Liquor liability insurance covers the cost of damage brought by a third-party in an alcohol-related accident. When it comes to alcohol, you also need to take personal responsibility for it. For instance, North Italia restaurant faced a lawsuit for serving alcohol to an underage driver that led to a fatal crash. Hence, not only you want to prevent such incidents but also save your pocket from hefty medical bills.

Employment Practices Liability Insurance (EPLI)

EPLI covers against lawsuits such as discrimination, workplace torts, and sexual harassment filed by the employees. Equal Employment Opportunity Commission data shows that 90,000 EPLI cases come out every year where each case charges an average of $450,000. For example, an employee can file a case for workplace discrimination or harassment and can incur you a significant cost. Therefore, having an EPLI and taking precautions can your business from massive losses.
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How Much Does Restaurant Insurance Cost?

Restaurant insurance considers several aspects in determining its cost. It includes:
  1. The type of food sold
  1. Cooking methods
  1. Number of employees
  1. Value of business equipment and property
  1. Value of structure

Don’t wait until it’s too late! Get your affordable and custom-tailored restaurant insurance policy quote for your business today.