Restaurants provide customers with meals, beverages, and other food-related services. These services come with various risks, such as accidents, property damage, and legal liability. Restaurant insurance is designed to protect restaurants from these risks and provide coverage against specified potential losses. Here are some of the most common things covered by restaurant insurance policies:
1. Spoilage
Losing food to spoilage can happen during power outages, refrigeration failures, or other unexpected events. It is expensive and can be difficult to recover from food loss. Restaurant insurance may include a spoilage policy to reimburse you for lost food and help you get back on your feet. It covers replacement, cleanup, and business interruption expenses.
2. Liquor Liability
Selling and serving alcohol is a profitable part of the restaurant business, but it also comes with particular risks. Liquor can be abused, leading to problems such as over-intoxication and physical injury. Certain restaurant policies also cover fines and other penalties levied by governing bodies related to serving alcohol.
3. Employee Injury
Employees can get injured on the job by slipping and falling, lifting heavy objects, or getting burned. They might be unable to work because of the injury and require medical care. Workers’ compensation insurance covers medical expenses, lost wages, and other costs related to workplace injuries. Most states require business owners to have workers’ compensation insurance no matter the number of employees they have.
4. Commercial Property
The building, equipment, and fixtures that make up the restaurant are vulnerable to fire, theft, vandalism, and other disasters. They can also wear out from normal use and require repairs or replacement. Commercial property insurance can cover repairs or replace damaged or destroyed assets such as machinery, furniture, and electronics. If you don’t own the building your restaurant is in, you may be able to opt out of this coverage.
5. General Liabilities
Causing harm to customers or other third parties through negligence can lead to a lawsuit. Restaurants are particularly vulnerable to bodily, advertising, and property damage claims. The nature of their business exposes them to a wide range of risks, including food poisoning, slips and falls, and serving alcohol to minors. General liability insurance covers legal defense costs, settlements, and court awards related to these claims.
6. Employee Dishonesty
Employees can directly or indirectly steal money, supplies, or equipment from the restaurant. This type of theft is hard to detect and prevent, but employee dishonesty insurance can help. It covers losses caused by dishonest acts of employees or volunteers, such as embezzlement, theft, and forgery.
7. Business Interruption
If your business can’t open due to a covered peril, such as a fire or hurricane, business interruption coverage can help you stay afloat. It pays for lost revenue and operating expenses while the restaurant is shut down for repairs or restoration. Business interruption insurance may also cover extra expenses incurred when you relocate the business temporarily due to a covered loss.
8. Business Owner’s Policy
A business owner’s policy (BOP) combines property, liability, and business interruption coverage into one package. Restaurants commonly use this policy as it provides broad coverage at a discounted rate. It can also reimburse losses related to theft, customer injury, and other mishaps. While coverage and rates vary by provider, BOPs often provide additional protection, such as equipment breakdown and fraudulent acts.
9. Commercial Auto
If your business owns vehicles, such as food trucks or delivery vans, you need commercial auto insurance to cover any damage or injuries that occur while they are in operation. This policy pays for medical bills, repairs, legal fees, and other costs pertaining to vehicle-related accidents and losses. You can also add coverage for roadside assistance, rental car reimbursement, and towing expenses.
10. Inland Marine
Inland marine insurance covers property transported or stored away from the premises. This includes equipment, supplies, and inventory that are moved regularly for delivery, catering, or other purposes. Inland marine insurance covers losses from accidents, theft, or vandalism while in transit. This can provide peace of mind for restaurants operating food trucks or catering events at other locations.
Secure Your Business With Restaurant Insurance
Restaurant insurance provides coverage for many of the risks associated with owning and operating a food service establishment. The right coverage can help mitigate losses and protect your business from legal liabilities. Working with an insurance provider that understands the specific needs of restaurants can help you find the right policy for your business.
