Top 5 Things You Need to Know About Insurance If You Own a Restaurant

Posted on Aug 31, 2022
Top 5 Things You Need to Know About Insurance If You Own a Restaurant

Owning a restaurant can come with a whole lot of problems. From the risk of property damage due to a fire hazard and injuries of the kitchen employees to theft and food storage or foodborne illnesses, running a restaurant has its share of risks. Getting restaurant insurance is a great way to mitigate the risks while concentrating on expanding your business.

Here are the top five things you need to know about restaurant insurance.

1. How can restaurant insurance provide value to your business?

Restaurant insurance can do the following to help you expand and prosper in your business:

  • Help in analyzing and assessing hazards
  • Assist in safety inspections
  • Provide training for your staff in safe food handling procedures to prevent hazards
  • Conduct alcohol server training
  • Assist in the compliance of regulations, including OSHA

2. Who is covered under restaurant insurance?

Businesses that cook and serve food are typically covered under restaurant insurance, like:

  • Cafes and coffee shops
  • Bars and dine-ins
  • Fast food franchises
  • Delis, lounges, and pizzerias
  • Sandwich shops
  • Food delivery services
  • And many more.

3. What is covered under restaurant insurance?

Restaurant insurance generally is a business owners policy that includes:

General liability insurance: 

General liability insurance protects your business against injuries or damage to other people, such as your customer. Also, certain states may require businesses, including restaurants, to purchase liability insurance.

General liability insurance can pay for:

  • Customer bodily injury: Where a customer gets injured in your restaurant.
  • Customer property damage: Where property of a customer is damaged because of an employee’s action on your business premise.
  • Damage to reputation: This can happen from wrongful eviction, libel, slander, or malicious prosecution.
  • Advertising damages: Damages arising from infringement of copyright.
  • Damage to your rented premises: Where damage occurs on your rented premises because of fire, explosion, or natural hazards, the policy can cover the repair expenses.

Commercial property insurance:

 The coverage can protect your 

  • Building
  • Tools and equipment used in business
  • Inventory
  • Furniture
  • Personal property when damaged because of fire, burglary, theft, or other natural disasters.

Often commercial property insurance includes business interruption insurance.

Business interruption insurance/business income insurance:

Where a covered loss forces you to close your business temporarily, business interruption insurance/business income insurance can cover the following during the period of interruption.

  • Revenue your business would have generated if it were open
  • Taxes, whether you pay them quarterly or annually
  • Payroll for your employees
  • Relocation costs where you need to move your business to a temporary location
  • Loan payment assistance when there is a work interruption

Workers’ compensation insurance:

Restaurants hiring employees also need to get worker’s compensation insurance to protect the employees from injuries and illness resulting from the business.

The employee benefits include:

  • Employee’s medical treatment and care
  • Disability benefits
  • Replacement of lost wages where the employee needs to take time off work for recovery purposes
  • Death benefits, which include assistance towards funeral expenses if an employee loses their life because of a work accident or a job-related illness.

Workers’ compensation insurance can also include liability insurance coverage to protect you from legal expenses from lawsuits filed by an injured worker or their family.

Other insurance coverages you should consider to protect your restaurant are:

Liquor liability insurance:

If your restaurants serve liquor, getting liquor liability insurance can provide coverage for legal fees, settlement charges, and medical charges where alcohol is served to an intoxicated party that damages property or injures another.

Some states require you to get this insurance to get a liquor license.

Restaurant crime insurance:

The insurance can be included in your business insurance policy to protect you from employee dishonesty, theft, forgeries, and data breaches that can cause business loss.

4. How do I calculate the cost of restaurant insurance?

The cost of restaurant insurance can vary widely based on the following factors:

  • The policy you choose, including details about coverage and deductibles
  • The unique risks faced by your restaurant
  • The value of your property and whether it is owned or rented
  • Your insurance claim history

5. How do I get restaurant insurance?

To get restaurant insurance, you need to:

  • Submit an application to the insurance company stating details about your business, such as its revenue and number of employees.
  • Compare the quotes and coverage and choose the policy suitable for your business.
  • Finally, pay for the policy and get a certificate of insurance.

In Summary

In the course of business, restaurants go through a wide range of risks that can make them a potential target for lawsuits and other business liabilities. Restaurant employees often use equipment that can cause injury and damage to the restaurant property, causing loss to the business.

Restaurants get many customers daily; harm to them from accidents or lousy food can cause unexpected loss to the business income and reputation in the long run.

Getting restaurant insurance tailormade for your concerns can help you protect yourself and your employees from unexpected losses and prevent financial setbacks in the future.

Reach out to us here at Otterstedt Insurance Agency for a customized insurance quote for your restaurant. 

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