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What Insurance Coverage Do Restaurants Need?

You never expect the worst to happen to you, but you want to be prepared in case it does.

To prepare for those worst-scenario cases, a comprehensive restaurant insurance plan is vital for your restaurant’s success. By putting an adequate insurance plan in place, you ensure that your restaurant is covered for a wide number of eventualities and that you can have peace of mind despite potential disasters. On the other hand, by failing to invest in adequate business insurance for your restaurant, you can put your business—and your finances—at risk.

Restaurant Business Insurance: An Overview

The purpose of business insurance is to protect your business from any unexpected or costly events that are outside of your control and can have a negative impact on your business.

Adequate insurance endeavors to ensure that you remain financially comfortable regardless of the fallout from any issues that your restaurant may experience, such as a natural disaster like a flood, building repair costs resulting from a fire, or expensive legal fees related to a court case against your restaurant.

There are endless possibilities for types of insurance and coverage, so when it comes to restaurant insurance, you need to make sure you have the right type of coverage in place for your business, location, and needs.

For example, restaurant owners need to think about the financial implications of building destruction and product loss due to a flood or fire; legal fees incurred from a customer who suffers an injury in your restaurant; consequences of a vehicle crash caused by a delivery driver; financial loss due to supply chain disruptions; and various other potential situations.

To help you ensure that you have the right type of restaurant insurance in place, below is a guide to the different types of coverage available that restaurants may need.

General Liability Insurance

General liability insurance will protect your restaurant against third-party claims, such as property damage, bodily injury, or personal injury. For instance, should a customer or member of staff slip down the stairs and fracture their spine at your restaurant, general liability insurance would cover this.

Of course, there are also other types of liability insurance that you may need to add to offer extra coverage. These include the following:

  • Product Liability Insurance: Product liability insurance will cover you if your food were to make a customer ill. This type of liability insurance is essential for restaurants to protect themselves from unfortunate mistakes or disasters.
  • Liquor Liability Insurance: If your restaurant serves alcohol, you need to have liquor liability insurance in place. You can be liable if a customer drinks your alcohol and then injures someone or damages property. For instance, if alcohol is served to a customer who then proceeds to drive home while drunk and crashes on the way home, you could be held accountable, and it’s important to note that general liability policies do not include claims stemming from intoxication.
  • Employment Practices Liability Insurance: Employment practices liability insurance offers coverage to employers for claims made by employees who allege that they have been discriminated against in one way or another, such as their contract of employment being terminated for an unfair reason.

Commercial Property Insurance 

A restaurant shouldn’t open its doors without commercial property insurance. This will cover damages to your property, furniture, equipment, and more.

For restaurants, this may include business income disruption, which replaces regular income should your restaurant be forced to close due to damaged property, and spoilage insurance, covering your losses if your produce goes bad due to a power outage or other malfunction.

Commercial Auto Insurance

Commercial auto insurance is important if you use a vehicle for any aspect of your restaurant’s operations, such as for delivering takeout orders or picking up deliveries.

When you use a vehicle for business use, rather than for personal use, it may no longer be covered under your personal insurance. It’s worth investing in commercial auto insurance to make sure that you have adequate protection in place to cover damages, product loss, and bodily injury in the case of an accident.

Workers’ Compensation

If one of your employees falls ill or is injured due to a workplace incident, workers’ compensation can cover their medical costs, lost income, and other financial losses. Additionally, should a work accident cause an employee’s death and their family sues you, workers’ compensation will help pay those costs.

Every restaurant business has its own specific insurance needs. Factors such as size, the types of items sold and served, and additional services like delivery impact a business’s insurance needs. The good news is that Bethany Insurance can help your business find the perfect plan with the right level of restaurant insurance coverage.

When it comes to running a restaurant business, you don’t want to take any chances. It’s vital that adequate insurance protection is in place from the get-go to give you peace of mind and security in case of profit-impacting incidents.

This Post Has One Comment

  1. Afton Jackson

    I’ve always wondered if restaurants have specific insurances that they need to file for themselves. I found your example of Liquor Liability insurance very interesting because I’ve been around my fair share of restaurant-bars and I know that this is a common place for very unwanted alcohol-related incidents to happen and it makes sense that the bar owners would want to make sure that they’re not accountable for anything bad happening. If ever I owned my own restaurant I’d make sure that I check for any other insurances that can help secure my business before starting operations.

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