What Makes Restaurant Insurance Different From Other Business Insurance?

Chefs cooking

No matter how hard you work to ensure everything goes smoothly, problems can and do arise in a restaurant. Restaurant owners have exposure to a wide range of risks that make them vulnerable to liability and financial loss. Restaurant insurance is different from other types of business insurance as it is designed to address the unique risks faced by business owners in the foodservice industry.

What Types Of Coverage Should Be Included In A Restaurant Insurance Policy?

Foodservice establishments need insurance to protect them from a variety of risks. Types of coverage you are likely to need may include:

  • Business owner’s policy (BOP): This insurance combines commercial property and liability coverage in one policy. It helps protect the property on which your restaurant is located, including your building, equipment, and signage, and it also provides coverage for liability to customers and staff.
  • Workers’ compensation: If your restaurant employs workers, you are likely required by law to carry workers’ comp insurance. This coverage is designed to protect your employees in case of work-related injuries or illnesses and to protect you against lawsuits based on workplace injuries.
  • General liability: This basic coverage can provide protection against lawsuits arising from accidents and mishaps that occur on your property, such as slip and fall accidents, or if someone becomes ill from eating spoiled food products served in your establishment. It can also protect you from liability for damage to customers’ vehicles if you offer valet service.
  • Business income: Your restaurant business may suffer a significant financial loss if a key vendor is suddenly unable to supply what you need to keep your business running. Business income coverage provides protection against loss of earnings in the event of a covered loss.
  • Commercial auto: If you offer a food delivery service, you need commercial auto insurance for company-owned vehicles. If your delivery drivers are using their own vehicles, you need hired and non-owned auto liability coverage.
  • Liquor liability: Any establishment that sells or serves alcoholic beverages has exposure to liability if a customer under the influence causes bodily injury or property damage. Liquor liability insurance can help cover your legal costs and any damages arising from such an incident.
  • Employee theft coverage: Food and money are both easily accessible to restaurant workers. Employee theft coverage can help compensate you for financial losses if an employee steals from your business.
  • Food contamination/spoilage coverage: A power outage, equipment breakdown, or other events could cause food to spoil or become contaminated. This coverage can help replace the spoiled food.
  • Employment practice liability insurance (EPLI): Like other employers, restaurants are sometimes sued by employees making wrongful termination, discrimination, sexual harassment, or other employment-related allegations. EPLI insurance can provide protection against such lawsuits. You may also want to add third-party coverage to address claims made against your business by customers or vendors based on acts committed by your employees.

If you have a restaurant business, our helpful local agent can work with you to help ensure you have the coverage you need to fully protect your business at the best available rates.

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