Restaurant Insurance

Restaurants are one of the most challenging businesses to run. There are so many aspects to think about: building size, location, menu creation, hiring of staff, supplies, maintaining food safety, payroll, and more.

 

In the midst of all the responsibilities, having adequate insurance may not be in the forefront of your to-do list. Nevertheless, it’s crucial to protect your business from costly repairs, potential losses, and liability risks. That’s where restaurant insurance comes in. 

 

Jump To:

• What Is Restaurant Insurance?

• Who Needs Restaurant Insurance? 

• What Types of Insurance Do Restaurants Need?

• How Much Does Restaurant Insurance Cost? 

• FAQs

• Protect Your Restaurant Today!

What is Restaurant Insurance?

Restaurant insurance is a type of business insurance created to protect establishments that serve food or sell food in a restaurant-type setting. Some examples would be diners, fast-food places, food trucks, and of course full-service restaurants. Let’s dive into the types of restaurant insurance needed. 

Who Needs Restaurant Insurance?

Having insurance coverage will protect you and your employees from potential business-related losses, not to mention protecting the future of your restaurant as the restaurant industry is one the most highly competitive markets. Some of the types of business that need restaurant insurance include:

 

• Bakeries
• Bars and nightclubs
• Cafes and coffee shops
• Catering businesses
• Fast food establishments
• Food trucks and carts
• Full-service restaurants

What Types of Insurance Do Restaurants Need?

Given the nature of the restaurant business, there are multiple types of insurance business owners  need to consider investing in. The most common ones are: general liability, property insurance, worker’s compensation insurance, liquor liability insurance (if you plan to serve alcohol), food contamination and spoilage insurance, and business interruption insurance. Below is a more in-depth description of the essential types of coverage:

General Liability Insurance

This coverage protects your business from most common restaurant-related claims. Some of these claims include: third-party property damage and injuries. If a customer has an accident in your establishment – such as falling on a wet floor or being hurt due to a structural issue – this type of coverage can help cover legal and medical costs. Furthermore, it also protects your business financially in case of accidental damage to a customer’s personal belongings, neighboring property, or business. 

Property Insurance

Covers damages to the restaurant’s physical assets such as:

 

• Buildings (if you are leasing the building, check with the building owner on coverage).
• Kitchen and general equipment.
• Furniture and decor.
• Inventory

It’s also important to know exactly what your property is covered against. Does your coverage include protection against natural elements like earthquakes, flooding, and wild fires. Make sure to check with your provider if you have any questions. 

Workers’ Compensation Insurance

Workers’ compensation provides coverage if your employees become sick or injured on the job, ensuring financial protection and support. Worker’s compensation requirement varies per state. All states in the US, except Texas, mandate that employers provide workers’ compensation insurance. There are four states- Ohio, North Dakota, Washington, and Wyoming- that require employers to purchase workers’ compensation exclusively from the state fund. 

 

Liquor Liability Insurance

If an establishment serves alcohol, this coverage provides protection against alcohol-related claims resulting in property damage and/or bodily injury. This policy can be purchased as an endorsement to your general liability coverage or as a standalone policy. 

 

If a lawsuit were to occur, the liquor liability insurance will cover the following:

 

• Legal expenses such filing and lawyer fees.
• Medical bills related to injury.
• Costs to repair or replace property damage.
• Judgements or settlements by court.

Business Interruption Insurance

Also known as business income insurance, is the type of insurance that covers loss income, loan repayment, temporary relocation costs, taxes and ongoing expenses in the event of having to close down due to:

 

• Natural events such as fire or other natural disasters. 
• Vandalism and other physical damage as defined per policy. 

It is important to note exactly what types of scenarios are covered. Things that are not covered include:

 

• Pandemics such as COVID-19.
• Earthquakes and Floods – unless added as an endorsement.
• Government-mandated closures. 

Food Contamination and Spoilage Insurance

This type of insurance assists in reimbursing the cost of food and beverage contamination or spoilage due to the following:

 

• Prolonged power outage: Which causes refrigerators and freezers to not be able to maintain safe temperatures. If there is no back-up generator, fresh and frozen foods will need to be discarded.
• Recall from manufacturer: If you are using a certain ingredient, say frozen berries or egg whites that may have come into contact with a life-threatening bacteria, and have been recalled, you may be able to receive financial reimbursement.
• Equipment breakdown/failure: Food spoilage that results in equipment breakdown or not operating properly, for example a freezer cannot maintain a temperature of 32 degrees or various sections of the walk-in freezer have fluctuating temperatures, this can cause frozen foods to be spoiled and unfit to be sold and consumed. Please note, certain policies may require you to keep a regular maintenance schedule for your equipment in order for your policy to take effect.

Health Insurance 

While protecting your restaurant is essential, your health is just as important. Independent owners can benefit from individual health insurance, while group plans are ideal for those with employees. Most policies cover doctor visits, prescriptions, hospital stays, and preventive care, helping you stay healthy and keep your business running smoothly.

 

To get more information and a free insurance quotes, click below!

 

 

How Much Does Restaurant Insurance Cost?

The major factors in the cost of restaurant insurance are: location, number of employees, type and size of restaurant (high-end, serves, alcohol, has entertainment, etc.), and coverage limits and deductibles.

 

For specific types of insurances, you can expect to pay on average for:

 

• General liability insurance– the average is between $500- $3,000 annually. 
• Property insurance – average is about 1 to 3 percent of your property’s value. The higher end your restaurant is, the more expensive it will be.  
• Workers’ compensation insurance costs are based on the number of employees, type of business you operate, and which state you are in. Some states have higher premiums than others. 
• Liquor liability insurance can vary significantly. This is largely based on the type of alcohol and amount served. Typical costs are between $500 and $2,000 annually. 

As a restaurant owner you can expect your annual insurance premiums to be, on average, from $2,000 to $10,000 annually for a comprehensive insurance package. 

FAQs

Is restaurant insurance required by law?

Depending on which state your restaurant is in, certain insurances are required. For example, workers compensation is required by law in most states. Other policies, like general liability insurance, may have a minimum and/or maximum coverage amount.  

 

What happens if I don’t have restaurant insurance?

Not having restaurant insurance is an enormous risk and one that is highly not recommended. You will be solely responsible for any and all restaurant-related accidents, lawsuits, damages, and losses. 

 

 Can small restaurants or food trucks get affordable insurance? 

Absolutely! Most Insurance providers are able to tailor policies for small businesses, including food trucks, mom and pop stores, and boutique coffee shops. Due to the smaller size of these establishments, rates are generally on the lower end of the average range. 

 

How can I reduce my restaurant insurance costs?

The best way to keep insurance costs low is to maintain a good safety record, have risk-reducing policies in place, and have multiple policies with the same insurer. All of this in the long run will help keep your insurance premiums as low as possible with minimal increase. 

Get Protected Today with EZ.Insure!

In the expensive and ultra-competitive world of operating a restaurant, it is vital to protect your business, employees and assets. There are too many variables and unknowns to go without insurance and risk not being able to recover from a catastrophic event.

 

As a reliable and trusted industry partner, EZ.insure can help you find the right policy to fit your needs quickly and with ease! 

 

To compare plans and get free quotes today, click the button below or call 844-770-0876.