Every restaurant is unique, and it's not just the food that makes it unique, it's also the atmosphere. Think about some of the most popular restaurants you've frequented. Property is one of the most overlooked coverages when it comes to Restaurant Insurance. This is because sometimes it's the ambiance that can add value to the restaurant experience. Here's a breakdown of Property Insurance for Restaurants:
Tenant Improvements and Betterments also known as your build-out, if you're leasing. If you own the building, this would be Building Insurance.
Business Person Property: Equipment, furniture, and stock would fall under this coverage. Business Personal Property (Also known as BPP) coverage can provide coverage for fire, theft, smoke, vandalism and other perils. Make sure to review the coverage limits as needed.
Business Income: Provides income if a restaurant is temporarily out of business due to a covered peril. Maybe it's a fire, smoke, or even vandalism, think about all the costs you have even though you don't have revenues coming in. Rent, loan payments, wages, taxes can all continue to accrue during a closure. There's also Business Income for cloud service interruption now. This coverage helps pay for lost business income if you need to suspend or slow business operations because of an unplanned and unannounced interruption in your cloud service.
Temperature Change and Spoilage: Your refrigeration system suffers a mechanical breakdown which causes all perishable products to spoil. This coverage helps cover the cost to replace the lost stock. Some restaurant policies will have a sub-limit for this type of exposure. If it's listed as a covered peril, make sure you understand the limit and if a deductible applies. For example, I've seen policies that automatically include $5,000. That might not be enough.
Food Contamination: Provides coverage for lost income if your operations are suspended by a public health authority due to the discovery of food contamination.
Signage: Sign coverage is usually included on a Businessowners Policy (BOP), but is limited to a certain amount. I highly recommend having a discussion with your insurance company or agent about this coverage.
Fine Art: If you have fine art in your restaurant, you need to make sure it's valued properly on the policy. This could mean providing appraisals. There could be a limit on the policy for this coverage. For example $2,500. This might not be enough. Fine art can get tricky to insure. Make sure you're aware of your limits and deductible.
This is just a starting point when it comes to Property Insurance for Restaurants. I highly recommend making sure you review the coverage limits for each of these. Also understand what perils are covered and if a deductible applies. If you have questions, please feel free to contact me. I am happy to help.
Commercial Insurance Agent
The cost of insurance always seems to come up and sometimes it's difficult to give an estimate. Restaurant Insurance Cost can vary depending on several factors. Here is a list of 5 factors that can impact what you will pay for Business Insurance.
1. Gross Sales
The higher the gross sales, typically the higher the General Liability premium will be. It makes sense if you think about it, the more people you serve, the more you will pay for insurance. Not sure what you're gross sales will be? That's OK. Insurance companies typically go off estimates and will calculate the actual premium by doing a premium audit at the end of the policy period.
2. Property Coverage
How much property coverage do you have? You'll want to break this down for your agent by equipment, business personal property, tenant improvements/betterment's or building coverage. The more coverage you have, the more premium you'll pay. You might consider different deductible options to reduce the premium.
3. Loss History
Have there been any previous losses claims/losses? This can have a big impact on premium and also the number of insurance companies willing to write your restaurant.
4. Are You Selling Liquor
If you plan on selling liquor, are you going to want Liquor Liability? It's not required, however, it is highly recommended. This coverage can increase premium significantly. Also, what kind of drink specials are you going to have? Some insurance companies shy away from certain happy hour establishments or college bars that serve food.
5. Years in Business
Have you been in business more than 3 years? Some insurance companies won't write restaurants if they've been in business less than 3 years, so this can impact how many insurance companies will provide you with a quote.
Hopefully this list was helpful. There are many more factors that can have an impact on Restaurant Insurance Cost. The range for premium can vary. I've had a small restaurant with sales of $80,000 and $30,000 in property coverage pay around $100 per month; and a larger establishment with sales of $1.5M and $600,000 in property coverage pay around $1,000 per month. Let me know if you have any questions about Restaurant Insurance Costs or any other type of Business Insurance. If you would like a quote, I'll just need the Restaurant Insurance Application below.
Commercial Insurance Agent
When it comes to Business Insurance, Restaurant Insurance can be a little confusing at times. If you are renting, you probably have your landlord telling you what you need in the lease agreement. It would be nice to know what it all means, right? If you are opening your first restaurant, or have been in the industry for several years, it would be nice to see what your options are, right? Given all the perilous exposures, I'm sure you know that some kind of insurance is wise to have in place. Hopefully this post will help give you a better understanding of what's out there when it comes to Restaurant Insurance. So what types of Insurance should you consider? Below are the ones I would consider at the very minimum.
General Liability: If a customer is injured at the restaurant, maybe they slip and fall or a server spills a hot plate on a customer, General Liability can provide you coverage. Product Liability, typically included in the General Liability coverage, would provide coverage if a customer got sick from eating at your establishment. Most landlords require their tenants to have this coverage. It’s also pretty common for them to request to be listed as an Additional Insured on the policy.
Liquor Liability: If you serve alcohol, you should consider this coverage. For example, a server provides alcohol to an intoxicated customer and they drive away and injure someone, you could be held liable, even if you only served them one drink. Liquor Liability Coverage can help with your legal costs, court fees, and civil damages resulting from the sale of liquor at your restaurant.
Property: Think about all the equipment, furniture, stock and computers you have. Property coverage can provide coverage for fire, theft, smoke, vandalism and other perils. Did spend money on a build out for the restaurant? Tenant Improvements and Betterments can be insured as well. If you own the building, building insurance is a must, and is probably going to be required by the bank. When reviewing your policy, it's also always a good idea to look at your property deductible.
Business Income: As the name implies, it provides income if a restaurant is temporarily out of business due to a covered peril. Maybe it's a fire, smoke, or even vandalism, think about all the costs you have even though you don't have revenues coming in. Rent, loan payments, wages, taxes can all continue to accrue during a closure. This coverage can be a dollar amount or it can be insured Actual Loss Sustained. Make sure to ask about the waiting period for this coverage.
Food Contamination Insurance: Food could be mishandled or food could arrive at your restaurant carrying a bacteria and make your customers sick. Food Contamination Insurance provides coverage for lost income if your operations are suspended by a public health authority due to the discovery of food contamination.
Temperature Change or Spoilage Coverage: Your restaurant depends on proper food storage, but your refrigeration system may suffer a mechanical breakdown, which may cause your perishable products to spoil. This coverage helps cover the cost to replace the lost stock.
Workers Compensation: Employees are around knives, stoves, ovens, wet floors and many more perils on a daily basis. If your employee is injured, Workers Compensation can offer the protection you need. What if that employee decides to sue you? Yes, Workers Compensation will respond to that as well.
Data Breach: Restaurants collect sensitive employee and customer information that could include bank account, credit card, and in some cases Social Security numbers. If that information is lost or stolen, it could leave your restaurant business open to lawsuits and also damage your reputation. Data Breach Coverage helps pay the costs of notifying impacted individuals and managing public relations if information is lost or stolen from your restaurant.
Sign Coverage: This one always seems to get overlooked. Here in the Austin area, we can have serious winds at times, so I've had some experience with signs falling. Some policies will include coverage, but only up to $5,000. Sometimes this is not enough. How many signs do you have? What is the cost? Make sure you review your policy limits and increase coverage if needed.
Also, if you hire a 3rd party for your deliveries, you want to make sure they are insured by providing you with a certificate of Insurance. If you are doing the deliveries, you will need to discuss Business Auto options with your agent.
As far as Business Insurance goes, if you own an eating establishment, Restaurant Insurance is a must. There are so many perils when it comes to restaurants, from slip and falls to employee injury. And if you serve beer, wine, and alcohol, the perils continue to mount. Based on my experience as an insurance agent, I’ve seen a lot of claims in this industry. Could it be the age and experience of the average employee or just that it’s a breeding ground for perils, I’m not sure. Perhaps a little of both. Let me know if you have any questions. This is an industry I am passionate about and have a lot of experience in. I am always happy to help and would love the opportunity to come visit with you at your restaurant. Restaurant application below.
Commercial Insurance Agent