Insurance for the Restaurant Business
Wondering if you need small restaurant business insurance? It doesn’t matter if you own a small cafe or a large, bustling grill — restaurant insurance is a must.
From chophouse to canteen, diners to drive-ins, aside from great food there is one constant — liability. You’ve got staff in the kitchen working with fire and sharp objects, the front of house working with customers, and the general public spending time on your business premises. What could go wrong?
Many types of insurance are a great fit for the restaurant business, including restaurant liability insurance, workers’ compensation for restaurants, commercial property insurance, and more.
Restaurant liability insurance
Liability insurance is broken into two parts: general liability insurance and professional liability insurance. Professional liability isn’t as critical for restaurants… but general liability is a perfect fit.
Restaurant general liability insurance
General liability insurance got its name for a reason. It’s a general coverage for the many things that can go wrong when you own a business — including property damage, third-party bodily injury, personal/advertising injury, and lawsuits.
If you work with the public, this coverage is a must. And let’s hope you’ve got customers coming in… otherwise figuring out the best insurance for your restaurant isn’t your biggest worry.
When people are on your business premises and something happens, you can be held liable. That’s why restaurant general liability insurance is so important. Here are a few examples as to how this insurance coverage can benefit your restaurant business:
- Property damage: You work at a pizzeria and you’re serving a huge soccer team whos there celebrating a big win. Parents have their iPads and iPhones out sharing photos of their children as you’re serving a massive tray of soda drinks. You accidentally spill your tray, ruining the electronics and rendering them useless. General liability insurance would cover replacement or repair costs.
- Third-party bodily injury: Let’s say you run a saloon. On Thursdays there’s square dancing, so the crowd can get rowdy. Drinks have been spilling, and the floor is slick — causing a patron to slip and fall, breaking their wrist. General liability insurance would cover the medical bills associated with the accident.
- Personal/advertising injury: Everyone has bad days at work. And sometimes, it leads to ranting on social media. That’s all fine and dandy, until the customer that you’re ranting about online sees your post. Should someone file claim against you involving slander or libel, this policy will protect you. This coverage also includes copyright infringement.
- Lawsuits: If an upset customer decides to sue for damages, court costs and legal fees are covered by restaurant general liability insurance.
Restaurant workers’ compensation insurance
Restaurant Workers’ comp covers restaurant businesses in the event of an owner’s or employee’s job-related injury. Restaurant workers’ comp is necessary for businesses to stay protected in the event of someone getting hurt or sick on the job.
Workers’ comp for restaurants protects you against a variety of risks, including injuries from a hot stove, open flame, knife cut, or slip-and-fall accident. If you or an employee is injured while working, medical costs resulting from the injury will be covered.
If you are hurt to the point of not being able to return to work, lost wages may also be compensated. Should you need long-term assistance, workers’ compensation has solutions.
Learn more about workers’ compensation insurance.
Want to find out about restaurant workers’ comp rates? Check out our workers’ comp cost analysis.
Restaurant commercial property insurance
Also known as business property insurance, commercial property coverage protects your work inventory, tools, and equipment. As a restaurant, you rely on many items to create your delicious dishes, like expensive ovens, knives, fryers, and freezers. Not to mention you have all of your fresh and frozen food that’s ready to be prepped.
If any of your inventory or equipment is damaged due to fire, theft, vandalism, or natural disasters, commercial property will cover the losses and pay to repair or replace the items.
Not only are your goods and supplies covered, the building itself is covered by this policy, as are all of the building’s contents, including any computers or devices your business owns.
Business owner’s policy
Commonly referred to as a BOP, these policies offer a packaged deal at a discount. Combining general liability insurance and commercial property, BOPs offer great coverage at a very affordable price.
Catering insurance for restaurants
Does your restaurant work off premises? If so, you may want to look into inland marine insurance, business auto insurance, and hired & non-owned auto insurance.
Inland marine insurance
Similar to business property insurance, inland marine insurance covers commercial property. However, this coverage protects your items in transit and while at other locations. Once you are 500 feet away from your business premises, your commercial property coverage ends. That’s why inland marine insurance is so important.
If an accident happens while traveling to an event, causing damage to the food and supplies, or something catches fire while on location, inland marine insurance will protect your restaurant business.
Business auto insurance
If your business owns a vehicle, you definitely need this coverage. Even if you rely on your personal vehicle for work, you should still consider business auto insurance — because if an accident happens, it’s likely your personal auto insurance will not cover a work-related incident.
Hired & non-owned auto insurance
Hired & non-owned auto insurance covers vehicles that are borrowed, rented, or hired on behalf of your business. This policy also extends liability coverage to employees who use their personal vehicles for work-related purposes.
What’s the cost of insurance for a restaurant business?
The cost of restaurant insurance varies by coverage. Insurance rates depend on the type of work you do, the number of employees you have, and the state you operate in.
To provide scope, a small operation might be able to purchase a BOP for $500 a year, whereas a true general liability policy might cost $600 per year.
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