Insurance for Restaurants: Do You Know What Policies You Need?

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Insurance for Restaurants: Do You Know What Policies You Need?

Restaurants are among the toughest businesses there are. About 17% of restaurants fail in their first year. It’s one of the many reasons why insurance for restaurants is a must.

On top of that, you have to be concerned with different types of liabilities. As a business that serves the public, you’re extremely vulnerable to lawsuits. There are also employee issues to deal with.

That’s why having the right types of insurance will ensure that your business is protected from any eventuality.

Read on to find out what you need to have to make sure your restaurant has the best coverage.

General Liability Insurance

This is must have restaurant insurance. No question. A lot of the liabilities for restaurants will be covered by general liability insurance.

A customer slips and falls in your restaurant. This type of issue is the most common source of general liability claims for restaurants. With general liability insurance, you’re covered. 

You’re covered when someone falls ill after eating at your establishment. There are too many frivolous lawsuits against restaurants and you want to be sure that you have adequate coverage to guard against them.

Property Liability Insurance

Property insurance can cover damages sustained to your building, restaurant equipment, and inventory. Property insurance is likely to cover your business in a fire or if someone vandalizes your building. You’ll want to be sure that you have a policy that covers you in the event of a fire or national disasters.

Worker’s Compensation

The health and safety of your workers have to be a high priority for restaurant owners. Restaurant employees are on their feet all day and have a high rate of slip and fall injuries. Should one of your employees be unable to work because of an injury sustained at work, your business can cover the costs.

Worker’s comp is often mandatory for businesses with employees.

Commercial Auto Insurance

Auto insurance should be considered if your business uses company cars for deliveries. In some instances, your employees will use their own vehicles for business purposes. You want to make sure that no matter who’s on the road for your business and what vehicle is used, you’re covered.

Product Liability Insurance

Do you sell products on the premises? Anything like a jar of your grandmother’s Italian sauce recipe or a killer BBQ sauce that you sell to customers would need to be insured.

You’d be covered in case someone got sick from your product and decided to sue.

Liquor Liability Insurance

As a restaurant, you’re covered in the instance where someone has too much fun at your establishment and overdoes it with alcohol.

This is referred to as Dram Shop insurance. A dram shop is any establishment, pub, or tavern that serves alcohol. Dram shop insurance limits the liability of these establishment owners if they drink too much at your restaurant and they injure themselves or get into an accident when they leave.

Inventory Insurance

Inventory Insurance is good to have if you keep a lot of inventory at your restaurant. For example, if you keep a freezer or large refrigerator stocked with ingredients.

Should you lose power at your restaurant, you could lose all of that inventory. That could cost your restaurant a lot of money to replace. Inventory insurance could cover the cost to replace your goods.

Crime and Theft

Unfortunately, crime and theft insurance is a critical part of insurance for restaurants. Restaurants have a lot of cash around, and it’s easy for employees to skim cash out of your registers. Your business is also a target for outsiders to come in and commit robbery.

That type of event can be devastating for small businesses. It’s a huge violation of trust and emotionally taxing. You can take the proper steps to financially recover from such an event by having this type of insurance policy.

Loss of Income

What would happen to your income if your restaurant had to close due to an unforeseen event? Fires and natural disasters could cause your restaurant to close, which could have long term consequences.

Some types of loss of income insurance also cover your restaurant if a vendor can’t make a delivery due to similar circumstances. If the delivery forced you to close your restaurant or otherwise lose income, you may be able to replace it through loss of income insurance.

Loss of income insurance is also called business interruption insurance. To determine the amount of insurance you need, take into account all of your operating expense that you have to pay whether you’re open or not.

Keyman Insurance

Are you opening your restaurant with a partner, say a family member or spouse? You bring certain strengths and areas of expertise while your partner specializes in other areas. You depend on each other so much, that the restaurant would be in trouble if one of you couldn’t work.

This is a type of disability insurance that pays benefits for the amount of time you or your partner can’t work.

Cyber Attack Liability

This is one policy that restaurant owners tend to overlook. This type of insurance is an add-on policy that can cover your business in case of a hacking attack. If you think that your business doesn’t need it because it’s a small business, think again.

More hackers are targeting small businesses, and these types of incidents continue to cost revenue. Restaurants do a lot of credit card transactions every day. The data that’s processed is valuable on the black market. 

Do you depend on take-out orders being placed through your website? What would happen if your website is hacked and offline for days?

If you depend on technology to run your business, this type of insurance is worth your consideration.

Insurance for Restaurants Is a Must

The restaurant business is tough, but with the right insurance, you’ll be prepared for any situation.

It’s not enough to have plain business insurance. You need a complete package that will protect your business for years to come. 

Want to know more about our insurance for restaurants? Get a free quote today.

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