Owning a restaurant is a challenging but rewarding way to make a living. As you build your restaurant business, it is important to have the right insurance in place to protect your investment. <\/p>\n\n\n\n
Whether your focus is fast food or fine dining, no restaurant business is immune from risk. Insurance policies designed for restaurant owners provide financial protection from food spoilage, kitchen fires, and other common issues.<\/p>\n\n\n\n
You can get restaurant insurance by buying a business owners’ policy (BOP), which packages together three essential coverage types for less cost than buying them separately:<\/p>\n\n\n\n
From there you can add customized coverage for your restaurant business.<\/p>\n\n\n\n
Restaurant insurance typically represents a collection of small business insurance policies that each protect against different risks inherent to the restaurant industry. Depending on the type of restaurant you have, you may need some coverages and not others. <\/p>\n\n\n\n
For example, a sandwich shop offering delivery will have different needs than a pub that serves beer. <\/p>\n\n\n\n
General liability insurance is perhaps the most important coverage in a restaurant insurance policy. Because your customers are consuming foods and beverages, you\u2019re always at risk of being sued if someone says your food made them sick.<\/p>\n\n\n\n
Liability insurance also covers you if someone is injured in your restaurant, or if your business is legally liable for property damage to someone else. The liability portion of a BOP can also provide you with funds to pay a settlement or court judgment and can cover your lawyer fees.<\/p>\n\n\n\n
A BOP also provides commercial property insurance. This covers damage to the restaurant building if you own it, and other property, such as kitchen equipment.<\/p>\n\n\n\n
Here are common coverages that many restaurant owners need. <\/p>\n\n\n\n
A business owner\u2019s policy includes general liability insurance and commercial property insurance in a bundled package. It also often includes business interruption insurance. It is designed for small to midsize businesses. You can also add on coverages to a BOP, such as equipment breakdown insurance. <\/p>\n\n\n\n
Commercial general liability insurance helps pay for your legal fees and judgments against you if a customer files a lawsuit for non-professional negligence. That includes property damage\u2014for example, a waiter spilling wine on a guest\u2019s fur coat\u2014along with physical injury, such as slip-and-fall accidents. It also covers the medical bills incurred by the injured customer. <\/p>\n\n\n\n
It also typically covers lawsuits related to advertising claims, such as libel, slander, copyright infringement, plagiarism, and malicious prosecution. <\/p>\n\n\n\n
You should check that your general liability insurance includes product liability as well, which helps cover lawsuits related to food poisoning. <\/p>\n\n\n\n
Workers\u2019 compensation insurance is required in most states for businesses with more than a certain number of employees. In some states, you\u2019re required to carry it even if you have only one employee. <\/p>\n\n\n\n
Workers\u2019 compensation insurance helps pay for your employees\u2019 medical bills and lost wages if they become injured or ill as a result of performing their job duties. At the same time, it typically protects the restaurant owner from employee lawsuits. <\/p>\n\n\n\n
Commercial property insurance helps pay for repairs or rebuilding if your restaurant\u2019s building or its contents, such as the kitchen equipment, are damaged by a covered loss. Common risks that are covered include fire and smoke, wind and hail, vandalism, some types of water damage, building collapse, and damage from aircraft or vehicles. <\/p>\n\n\n\n
If someone drives a car into your storefront, that would be covered, as would water damage from a leaking sprinkler. Earthquakes and floods are typically not covered, however, so some restaurant owners purchase separate policies for those risks. <\/p>\n\n\n\n
If you rent the space, you can often exclude the structure itself from your policy and only cover your equipment, but you should find out what the owner\u2019s policy covers first. <\/p>\n\n\n\n
Business interruption insurance helps replace your lost income after a covered loss. For example, if you were forced to shut down operations to repair damage from a windstorm, business interruption insurance would cover your lost income so you could pay your mortgage or lease, any due taxes or loan payments, and employee payroll. <\/p>\n\n\n\n
Business interruption insurance is often included as part of a business owner\u2019s policy (BOP).<\/p>\n\n\n\n
If you have equipment or inventory that you transport off-premises, you\u2019ll also need inland marine insurance. It covers business property that is transported, shipped, or stored off-site. If your property stays at your business location, you shouldn\u2019t need this coverage. <\/p>\n\n\n\n
If the food at your restaurant spoils due to a power outage or equipment breakdown, spoilage insurance pays to replace it. <\/p>\n\n\n\n
If equipment such as your air conditioning or oven fails, your business operations could be forced to stop. Equipment breakdown insurance covers mechanical, electrical, and pressurized equipment breakdowns plus refrigeration and A\/C units and computers. It may also cover lost income during repairs and the cost to replace food that spoiled as a result of the breakdown.<\/p>\n\n\n\n
Food contamination insurance helps pay for lost food due to contamination or equipment cleaning. If your restaurant is shut down, it can also help replace your lost net income. <\/p>\n\n\n\n
Liquor liability insurance helps pay for legal costs when your restaurant is held liable for serving someone alcohol. It also covers damage to your property and medical bills for an alcohol-related incident. <\/p>\n\n\n\n
Lawsuits regarding assault and battery or property damage by an intoxicated person, as well as drunk driving incidents, are also covered under a liquor liability insurance policy. <\/p>\n\n\n\n
If your restaurant owns a truck or other vehicles that it uses for deliveries or other business activities, you\u2019ll need commercial auto insurance. It typically includes bodily injury and property damage liability, comprehensive and collision coverage, and often medical payments and uninsured motorist coverage for your commercial vehicles. <\/p>\n\n\n\n
You\u2019ll need commercial auto insurance if you have a work vehicle. It includes liability coverage, which pays for property damage and injuries you accidentally cause to others. You can also get coverage for injuries to you and your passenger as well as coverage to repair or replace your work car if it\u2019s damaged in a car accident or other types of problems, like theft or severe weather.<\/p>\n\n\n\n
If your restaurant is the victim of a cyber attack, such as a data breach or cyber extortion, cyber liability insurance helps cover expenses such as data recovery, investigative services, lost income and lawsuits due to privacy breaches.<\/p>\n\n\n\n
Protects your restaurant from employment-related claims, such as discrimination, harassment and wrongful termination. Employment practices liability insurance should not be confused with employer\u2019s liability insurance.<\/p>\n\n\n\n
If you send an employee in their personal vehicle to pick up supplies for your restaurant, that is considered business use of a vehicle. Your business could be responsible for damages if the driver were in an accident. If you encounter situations where vehicles that your business does not own are being used for your business operations, or if you rent or lease vehicles, you\u2019ll need a hired and non-owned auto liability policy.<\/p>\n\n\n\n
The annual premium you\u2019ll pay for restaurant insurance depends on the size of your business, your location, what you\u2019re serving, and who you\u2019re serving. It also depends on the types of coverage you need for your restaurant. <\/p>\n\n\n\n
For a package that includes a business owner\u2019s policy, liquor liability insurance, and workers\u2019 compensation, most restaurants can expect to pay around $4,000 per year. But some restaurant owners who need commercial auto coverage may pay more than that. On the other end of the spectrum, a business package with coverage for a rented space can start as low as $299 annually.<\/p>\n\n\n\n
It\u2019s easy to get insurance coverage for your restaurant if you have your business information on hand. Insurance applications will ask for basic facts about your small business, such as revenue and number of employees. <\/p>\n\n\n\n
You can buy a policy online and get a certificate of insurance in three easy steps:<\/p>\n\n\n\n
If you own a restaurant, the odds are good that it is a main\u2014or only\u2014source of income in your life. Imagine an event that caused the restaurant to suddenly shut down or be sued: Could you financially survive? If so, for how long?<\/p>\n\n\n\n
With proper business insurance, you can financially recover in the wake of a disaster, such as a fire that destroys your business.<\/p>\n\n\n\n
In addition, restaurant insurance provides the funding to keep your business afloat if someone sues you.<\/p>\n\n\n\n
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