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