A Complete Guide to Restaurant Insurance
When a customer slips and falls, a stove catches fire, or a power outage causes all your food to spoil, insurance helps protect your business from financial loss. As a restaurant owner, you have a lot on your plate - no pun intended. A comprehensive insurance package gives you peace of mind, ensuring your business has the funds you need to make repairs, replace equipment, protect employees, and more.
In this guide, we walk you through policies for restaurants including commercial property insurance, liquor liability, and more. Plus, we share how Keller-Brown Insurance Services takes a consultative approach to ensure you have the best coverage for your budget.
What kind of insurance does a restaurant need?
From local cafes to fine dining restaurants, we insure a wide variety of food businesses in the Pennsylvania and Maryland areas. There is no one-size-fits-all approach to insuring a restaurant. That's why we work with clients to create a coverage package customized to your unique needs.
Although every food business has its own set of risks, most restaurant owners should consider investing in these insurance policies:
- General liability: A simple spilled drink could cause a customer to slip and get injured. As a restaurant owner, you're liable for incidents like this that take place in your dining room. Ensure your business is protected with general liability insurance.
- Commercial property: From industrial stoves to custom-made lighting fixtures, your building and the systems outfitted to make it run can be expensive. This coverage helps protect your building and anything permanently attached to it. Should any of these necessities be lost to burglary or damage, a commercial property policy can help replace them.
- Business contents: Losing your food and beverage inventory could be extremely costly. All it takes is one powerful thunderstorm to knock out power, causing your food to spoil. As we mentioned in a previous blog post, extreme weather events are on the rise. Although food and beverages aren't covered under your commercial property policy, business contents is the type of coverage you need to replace anything inside the premises that isn't permanently attached to the building. This includes inventory, tables and chairs, decorations, and more.
- Business income: Restaurants are at risk for water damage, fire, or other scenarios that could force you to close your business temporarily. Business income coverage allows you to continue paying your bills and your valued staff while the restaurant is closed for repairs due to a covered claim.
- Workers; compensation: Kitchens are filled with sharp knives, hot stoves, and slippery floors. Workers; compensation enables you to pay for injuries your team members may sustain while on the job. Plus, it doesn't just pay for their medical care. If your employee can't work due to the injury, workers; compensation can cover their wages.
- Equipment breakdown insurance: Unexpected breakdowns of your POS system or refrigerators could leave your business out of commission. Plus, a broken refrigerator often results in spoiled food. This coverage helps cover losses and repairs related to broken equipment.
- Liquor liability insurance: Accidents can happen after customers leave your place of business. If you sell, serve, furnish, distribute, or manufacture alcohol, you could be held liable. Liquor liability insurance can cover the costs of legal fees, medical bills, and other costs related to damages incurred by your patrons. In fact, if you're in the alcohol business in any way, exposure to liquor-related risks is excluded from a general liability policy. The only way to get coverage is through liquor liability insurance.
- Commercial auto insurance: Whether you have an official company vehicle used for off-site events or a team member who occasionally makes runs to the store for supplies, auto insurance is a must. This coverage protects you and your employees if they get into a car accident while on the clock.
Not sure where to start? Our team can help. We'll work with you to identify what type of insurance is essential for your business. Protect your restaurant from property damage, injury, and other risks with a comprehensive insurance plan.
How much does restaurant insurance cost?
Your insurance premium is determined by a wide variety of factors including what you serve and where you're located. For instance, a bakery in York is likely to have a very different policy from a seafood restaurant in Baltimore.
Here are just a few of the factors that carriers take into account when determining a quote for restaurant insurance:
- Location and size: Where your business is located and the size of your space both influence the cost of your coverage. While your location impacts the types of risks you; 're exposed to, the size of your space contributes to the cost of your policy.
- Quantity of liquor sales: For those in the alcohol business, the amount of liquor typically served is a major factor in the cost of your insurance. For example, if liquor accounts for up to 30% of your overall sales, liquor liability could be included in a package policy. However, if your alcohol sales exceed 30% of your overall revenue, then you may need a standalone - and costlier - policy.
- Events and entertainment: Insurance carriers will take into account whether your restaurant hosts special events or entertainment. Activities like these present added risks like accidents or injuries.
- Your hours of operation: You might not think about it, but the time of day your business is open impacts your level of risk. For example, a late-night bar is exposed to different risks than a coffee shop that closes in the afternoon.
Get customized insurance coverage for your restaurant.
Conduct a business review. Whether you're just getting started or you've been in the food business for a long time, it's essential to understand where your business stands right now. Changes in your life and in the economy impact your coverage needs. Ensure you know the value of your equipment, the size of your building, and other important information about your restaurant. Our team takes the time to get to know your business, so we can provide an accurate quote and address your coverage needs.
Conduct an insurance review. Do your current policies cover what you need them to? Did you recently expand the kitchen and invest in upgraded equipment? Changes like this impact your coverage needs. Plus, even if you haven't made any major changes to your restaurant, it's likely your coverage needs have changed due to inflation. Even if you're comfortable with your current policy, a coverage review ensures you're prepared for the unexpected.
Get a quote for restaurant insurance. As an independent insurance agent, we work with a variety of carriers to ensure you get coverage that matches your needs. Our agents will work with you to understand your business and your budget. Then, we;ll provide you with a list of options from several top-rated carriers.
You work hard to build your business. Ensure it's covered with the best insurance policy for your needs.
