Owning and operating a restaurant can be an exciting, rewarding and lucrative endeavor; however, these businesses also include many risks and exposures. Daily operations at a restaurant are full of potential perils and hazards, including hot surfaces, slick floors, sharp objects and perishable goods, all needing to be managed amid a fast-paced environment. Given the potential incidents that could arise from such conditions, those in charge of restaurants must prioritize assembling an adequate insurance portfolio.  

What Is Restaurant Insurance? 

When addressing a restaurant’s coverage needs, it’s first essential to understand that the term “restaurant insurance” may not refer to a single product. Although some insurance companies may offer prearranged packages that address many industry risks and exposures, businesses may need to work with a qualified insurance professional to assemble their own portfolio.  

What Does Restaurant Insurance Cover? 

The restaurant industry includes many subsets of businesses, such as fast food, diners and cafes. Still, while the details of these establishments’ operations may differ somewhat, several types of insurance may be suitable for the vast majority of restaurants, including the following: 

 

• General liability—This coverage can help pay for the losses of third parties, such as customers or passersby if they are affected by the following incidents:
• Bodily injury
• Property damage
• Personal and advertising injury (e.g., false advertising, wrongful imprisonment, copyright infringement, slander, libel)

• Business property—By including this coverage in its insurance portfolio, a restaurant can receive financial assistance for losses affecting its physical property, such as the following:
• Buildings
• Equipment
• Tools
• Furniture
• Signage
• Landscaping

• Business interruption—If a covered event forces a restaurant to temporarily close or adjust its usual operations, this coverage can help pay for the following losses and expenses:
• Lost income
• Rent/mortgage payments
• Employee wages
• Tax/loan payments

• Workers’ compensation— If an employee suffers a work-related injury or illness, this coverage can provide financial assistance for the following:
• Medical bills
• Lost or reduced wages
• Vocational rehabilitation
• Disability benefits
• Death benefits
• Legal costs

• Employment practices liability—This coverage can help pay for legal costs if a restaurant faces allegations of unlawful workplace practices, such as the following:
• Discrimination
• Sexual harassment
• Retaliation
• Wrongful termination

In addition to the aforementioned components, restaurants should also thoroughly analyze potential coverage gaps to ensure an adequate insurance portfolio. The following additions may be necessary: 

• Commercial auto insurance

• Professional liability insurance

• Cyber liability insurance

• Liquor liability insurance

• Food contamination and spoilage coverage

• Equipment breakdown insurance

• Commercial umbrella insurance

How Much Does Restaurant Insurance Cost? 

Like most types of insurance, the cost of suitable coverage for a restaurant may vary significantly. Insurers generally must consider many factors of a business, such as the following: 

• Products sold

• Cooking/preparation methods

• Location

• Restaurant property and equipment

• Number of employees

• Prior claims

• Portfolio details (e.g., coverages purchased, policy limits, endorsements)

Get the Right Coverage 

With a history of service dating back to 1897, the dedicated staff at FSB Insurance and C&T Insurance have the extensive knowledge and experience needed to help restaurants understand and fulfill their coverage needs. Contact one of our agents today to get started.