Own or Starting a Restaurant? Make Sure You are Properly InsuredPosted on May 17, 2018
Whether you’re a long-time restaurant owner or just starting out in the restaurant industry, adequate insurance coverage is critical. You’ve put a lot of heart, soul, money, and sweat equity into making your restaurant ownership dreams a reality. Protect that investment with the right types and amounts of restaurant insurance coverage.
Restaurants have somewhat unique insurance protection needs above and beyond what other businesses require. The more you know about the coverage options, the better able you will be to determine the best type of coverage to meet your needs.
Types of Restaurant Liability Insurance
Unfortunately for you, there is a lot that can go wrong in a restaurant that may leave you vulnerable to lawsuits and judgments awarded against you. Having the right kind of insurance protection can help shield you from the legal expenses and financial losses that result from these occurrences.
These are some of the types of liability coverage you may need to offer adequate protection to your restaurant:
- General liability insurance
- Liquor liability coverage (especially if you intend to or have a restaurant bar)
- Product liability insurance (protects against food poisoning)
- Commercial auto insurance (a requirement for restaurants that offer catering or delivery services in company vehicles)
- Non-owned vehicle insurance (essential for businesses that allow employees to make deliveries in their personal vehicles)
- Valet insurance
- Data breach insurance (coverage that is becoming essential and no business that handles credit card transactions can afford to go without)
- Umbrella insurance
Each type of coverage may be essential for helping to protect your business from the financial fallout of an accident or injury to one of your customers.
General Insurance for Restaurants
A restaurant is a business. With that in mind, it has some insurance protection needs that are fairly common to all businesses.
Property Insurance. One of the most essential is property insurance. This type of insurance for restaurants is critical for covering things like repairing or replacing the physical structure of the building if it is damaged or destroyed by a covered event as well as other physical assets of your business including fixtures, displays, etc.
Standard Business Owner’s Policy. Common types of coverage offered by the standard Business Owner’s Policy (BOP) or independently include:
- General liability insurance.
- Loss of inventory.
- Business equipment coverage.
These types of coverage are necessary for you to bounce back quickly after a disaster, like a tornado, fire, act of vandalism, etc. occur. They will help you cover the bills, pay your creditors, and keep the lights on until you can get your business open again after repairs are made.
Additional Insurance Protections Restaurants Need
Restaurants are huge risks. There are all sorts of things that can go wrong that will disrupt business and can lead to even bigger problems for your business along the way. While there is no one-size-fits-all insurance policy that can protect from every conceivable problem your restaurant might encounter, the insurance protections below can help soften the financial blow of many of them.
- Equipment Breakdown Coverage. This coverage helps cover the costs of repairing or replacing restaurant equipment damaged by power surges, mechanical breakdowns, operator errors, and burning out.
- Employee Dishonesty Insurance – while most businesses want to believe they are hiring honest people who would never do things to harm their business, the truth is that the risks are greater than most businesses will ever care to admit. This coverage helps protect your business from the financial fallout of hiring dishonest employees.
- Utility Services Coverage. This offers protection for your businesses from lost or spoiled food resulting from utility interruptions.
- Workers Compensation Insurance. This coverage protects your restaurant from lawsuits related to employee injuries that happen while working. This includes things like slip and fall injuries, burns, and other injuries that occur in the workplace.
- Business interruption insurance or business income insurance. This protection helps to replace some of the income that is lost while your business is closed or inoperable due to repairs or rebuilding after a covered event. It allows you to continue paying creditors and some salaries during this period.
Now that you know about the many types of insurance for restaurant owners, it is time to make sure you get the right amount of coverage to provide the level of protection that delivers the best possible peace of mind and doesn’t break the bank. Worth with a trusted and experienced insurance agency to find the perfect balance of coverage and cost for your restaurant insurance needs.
Here at Otterstedt Insurance Agency, we have nearly a 100-year history, and 1,000s of satisfied clients during that time. In fact, we’re counting down to our 100th year anniversary!