Running a restaurant requires a lot of background work to ensure that your restaurant is protected against risks, keeping yourself informed about Restaurant Insurance and its policies will give you peace of mind that your restaurant is safe.
Here we give you five things that business owners dealing with food or beverages need to know.
1. If You Even Need Restaurant Insurance
If you’re a small business owner who sells food or drinks, even if it’s not your main source of revenue, you’ll need to purchase Food Liability Insurance. This insurance policy protects you against risks associated with selling food and drinks at restaurants.
Working with food provides you with a wide array of vulnerabilities such as the danger of working with electronic equipment found in kitchens, food going bad, and the risks associated with having a large number of people in and out of the restaurant.
Restaurant Insurance protects small businesses against these vulnerabilities that are bound to happen as they are almost impossible to avoid. This type of insurance becomes an investment because it protects you against future risks.
If your business offers complimentary food, such as carbonated beverages or snacks, you won’t need a Restaurant Insurance policy. But locations such as bowling alleys, arcades, and golf courses that offer food and beverages at an additional cost should get a Restaurant Insurance policy.
2. What a Business Owner’s Policy (BOP) Covers
BOP is a general policy for business owners, but they are more specifically recommended to restaurants or businesses that sell food and drinks. This insurance policy helps small businesses cover accidents related to food, such as kitchen accidents, broken/stolen equipment, etc.
A BOP combines both General Liability insurance and Commercial Property Insurance. It’s provided at a lower price than purchasing both insurance policies separately. The coverage includes:
- Premises Liability
- Premises Medical
- Fire Legal Liability
- Business Income Insurance
- Building and Personal Property Protection
- On-Site Equipment Insurance
- Coverage for Inventory Loss
- Crime Insurance
3. What Your Employees Need
Not only do you want to protect your business and store, but you also want to protect your employees like your waitstaff, kitchen staff, cleaning crew, and hosts.
To protect employees there are Workers’ Compensation Insurance (Employers’ Liability Insurance) for small businesses where employees, who acquire a work-related inquiry, can claim benefits for treatment and missed wages.
If your business requires staff to drive vehicles, such as offering delivery services then you may need Business Auto Insurance to protect your drivers and commercial vehicles. The covers of this insurance include:
- Bodily Injury Liability
- Medical Payments
- Personal Injury Protection (PIP) Coverage
- Comprehensive Coverage
- Collision Coverage
- GAP Coverage
- Uninsured and Under-insured Motorist Coverage
4. What the Costs and Prices of Insurance Are
Since each business is different, in its amount and type of goods sold, the price of Restaurant Insurance is dependant on many factors.
Some of these factors include:
Services offered
These include things like off-location catering and event hosting. If you have other services such as entertainment or activities offered at the restaurant, like live entertainment or mechanical bulls), the price of insurance could be higher due to the greater potential for harm.
Amount of food & beverages sold
If your business only sells drinks or only has food on the side, then the price will differ compared to that of a business whose sole revenue comes from food and drink.
Number of locations
The more locations you have the more premiums will increase. In order to protect all locations, you’ll be paying more.
Safety measures
This depends on whether your restaurant has adequate protection such as sprinklers, alarms, video surveillance.
Your Cost of Goods Sales (COGS) will also be taken into account, for example, if you’re a bar owner and your alcohol sales are anything less than 50% of total sales that indicates that your food quality is low or you are charging too much. The liability coverage will depend on the sales amount.
Each restaurant is unique in its price for insurance, you can start with a personalized quote here.
5. How to Protect Your Business
Problems are inevitable when running a small business, especially when there’s the risk associated with serving food and beverages. Protect yourself and your employees against hazards by investing in Restaurant Insurance.
You can also visit us if you’re interested in Pharmacy Business Insurance to protect yourself against risks with running a pharmacy.
Get in touch with Bethany Insurance to see how our team of expert agents can help your restaurant find the right insurance policies that can give you extra support and peace of mind.
