Insurance Policies to Consider For Restaurant

Types of Restaurant Insurance Coverage

The following types of insurance coverages are generally recommended for restaurants:

• General Liability Insurance
• Property Insurance
• Liquor Liability Insurance
• Workers’ Compensation
• Business Interruption Insurance
• Food Contamination Insurance
• Commercial Auto Insurance

The cost of the policy will differ for each restaurant based on factors, including sales, location, etc., the premiums will be based on the type of coverage you choose and could be as little as $500 each year. Before getting any of the above insurance plans, you will need to understand the following:

• Type and age of the building
• Projected sales and number of customers
• Square footage of the location
• Equipment in your restaurant
• Type of fire and security system
• Value of equipment, technology, and inventory
• Number of employees
  
  

General Liability Insurance

General liability protects the business in the event that an employee or a client is injured on the premises. In addition, general liability also covers damaged reputations, copyright infringement lawsuits, costs related to food-borne diseases, and property damage.

Property Insurance

Property insurance will provide protection and coverage to restaurant owners for their property, such as buildings, kitchen equipment, and furniture. If you are leasing the place, the owner of the business will likely have insurance coverage for the building; however, you will have to get the contents within the property insured, such as furniture or equipment. 

It is necessary to ensure that you are aware of what the property is covered against. For example, is it covered against natural disasters, such as an earthquake or flooding? Or is it covered against fire? Every insurance policy varies for each provider, so make sure you know exactly what property insurance entails. 

Liquor Liability

Liquor liability protects the business in a situation when an intoxicated customer or employee attacks, injures, or damages the property or commits a crime within the premises of the building. You should, however, considering getting liquor liability insurance only if your restaurant serves alcoholic drinks. Liquor liability insurance is mandatory to obtain a liquor license.

Workers’ Compensation

Workers’ compensation protects the employees from the cost of unexpected work accidents in a restaurant. It assures that an employee will receive medical care in the event of an accident that leads to disability, illness, or injury. Workers compensation guarantees that the worker will continue to receive the missing paychecks for a specified period of time until they are fit to resume work again. This way, your employees are always protected, and you don’t have to worry about facing a lawsuit in case a worker gets injured due to dangerous working conditions. 

Business Interruption Insurance

Business interruption insurance ensures that a business is financially protected at the time of enduring a heavy loss caused by different events, including fire, theft, lightening, or falling objects. This type of insurance provides coverage against disasters that may result in the temporary closure of business. The most common cause of business interruption for a restaurant business is fire. 

Food Contamination Insurance

Food contamination insurance is mainly designed for those in the food business, including restaurant owners. The purpose of this type of insurance is to recoup the cost linked to the contamination of food items due to changes in humidity levels, malfunctioning equipment, or changes in temperature. Food contamination coverage is a necessity for restaurant owners since food spoilage can be a major problem. Food contamination insurance covers the expense of food spoilage caused by a power outage or equipment failure, or breakage. In addition, it also provides coverage for equipment cleaning costs and employee medical testing in case your restaurant shuts down due to food poisoning or any other illness. 

Commercial Auto Insurance

Commercial Auto insurance is recommended for restaurant business owners if they have a delivery service. This type of insurance safeguards the business from experiencing financial losses due to damage or injury sustained during an auto accident. It covers the cost of liability damages, physical damage, injury, medical expenses, and physical damage to the vehicle. Commercial auto insurance can also provide coverage for personal vehicles if they are being used for business operations. 

Essential Tips for Purchasing Restaurant Insurance Policy

Once you have shortlisted the insurance policies you need to get for your business, keep the following tips in mind before buying the policy:

• Do your own research first and gather information
• Go for insurance companies that are specialized 
• Don’t bundle similar insurance policies 
• Compare quotes of different insurance providers 
  
  

The process of choosing the best insurance policy according to the requirements and needs of your restaurant business can be overwhelming and tedious. Nonetheless, it is a crucial aspect of owning a business, especially a risky one. Commercial insurance ensures that your business is well-protected against unexpected claims and lawsuits. The right insurance policy will enable your business to recover any losses and bounce back up at the time of a worst-case scenario.