Property Insurance for Restaurants

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. 

Jason Matison
Commercial Insurance Agent
Austin Texas