Buy Restaurant Insurance

Restaurant insurance is a type of business insurance that provides coverage for financial losses and damages that may occur as a result of operations at a restaurant. This can include liability coverage for injuries that occur on the property, property damage, loss of income due to closures, and other financial losses.

It can also include coverage for food spoilage, employee theft, and legal expenses related to lawsuits or claims.

The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small restaurants ranges from $47 to $89 per month based on location, size, payroll, sales, alcohol sales, and experience.

There are several reasons why restaurants need insurance. Firstly, accidents and injuries can occur at any time, whether it be a customer slipping and falling on the premises or an employee getting injured while preparing food. Without proper insurance coverage, the restaurant could face costly legal fees and medical expenses.

Additionally, restaurants often have valuable assets such as equipment, fixtures, and inventory. Without insurance, a restaurant could suffer significant financial losses if these assets were damaged or stolen.

Furthermore, restaurants are subject to various regulations and laws that require them to have certain types of insurance coverage. For example, many states require restaurants to have workers' compensation insurance to protect employees in the event of on-the-job injuries.

In short, restaurants need insurance to protect themselves from financial losses due to accidents, injuries, and damages to assets, as well as to comply with legal requirements. Without insurance, a restaurant could face serious financial consequences that could potentially put them out of business.

Restaurant structure fires are usually more damaging in terms of costs than those in residential properties. Fire is a common hazard that all restaurant owners face, but it is not by itself. A comprehensive policy for restaurants is necessary to ensure that restaurateurs weather any peril without losing their businesses.

You may be required as the owner of a restaurant business to carry several insurance coverage types. The law requires some types of insurance, while financial institutions may require others if you have a large loan or you are paying on a mortgage for your business.

Further, if you lease the building in which you do business, your lease may have a clause requiring that you buy this type of restaurant insurance to stay compliant. Some types of insurance to consider for your restaurant include:

• Worker's comp insurance. In, it is essential that eating establishments, maintain worker's compensation policies to protect their employees while they do work on the premises. This insurance covers work-related accidents, injuries, and deaths.
• Unemployment insurance. requires UI insurance for employees. Sometimes this is included in the taxes that the business pays; other times it is a separate cost for the business owner.
• General restaurant insurance coverage. This type of coverage is designed for restaurant owners, and it covers property and liability damage based on the specific eating establishment's potential perils.
• Commercial auto insurance. If your restaurant delivers food in company-owned cars or if employees use company-owned vehicles while on the clock, this type of restaurant insurance protects the business from liability.
• Life insurance. If you have a large loan for your business, you may be required to maintain life insurance to cover the lender's output of capital should you die.

Owning a restaurant can be a risky endeavor. There are several potential liability risks involved in the operation of a restaurant, but restaurant insurance can ensure the business is covered if the unexpected happens. Some types of liability coverage available for owners of restaurants include:

• General liability insurance. Premise liability and operations liability ensures that if a customer or employee is injured on your business' premises, you are protected. Lawsuits often arise because of poorly kept parking lots or objects placed in a manner that causes a tripping hazard, leading to a fall injury. This restaurant insurance coverage takes care of damages and medical bills for the injured party.
• Product liability insurance. If the food you serve sickens a patron, product liability insurance can help. Oftentimes food-borne illness is the root of product liability claims. This insurance protects your business from the expense of claims and lawsuits resulting from your restaurant's actions in preparing and serving the food.
• Liquor liability. If your restaurant serves alcohol, then liquor liability insurance protects you from damage when an intoxicated patron causes property destruction or harm to another person.

These types of coverages generally pay for the legal fees required to represent your business in the event of litigation against you.

Property insurance for restaurants ensures that damage to the property does not put your business in a hard position financially. This may include damages resulting from crime, theft, fire, weather, or electrical issues in the building that houses your establishment. Within this type of coverage, you will often find:

• Building insurance. Coverage to compensate you for damages to the structure of your restaurant is an essential type of coverage for restaurant owners.
• Contents insurance. The contents of your restaurant are often expensive to replace. This may include furniture, flooring, lighting fixtures, and equipment used in the kitchen.
• Equipment breakdowns. Equipment that breaks down can mean a loss in business for your restaurant. Freezers, dishwashers, air conditioners, and other essential types of equipment are necessary for running your business, and equipment breakdown insurance ensures that you can get your equipment up and running if some crucial components fails.
• Food contamination insurance. Mechanical failures and power outages may lead to food defrosting and becoming unusable. This coverage helps you recoup costs from such events.
• Loss of income insurance. Should your restaurant need to close its doors due to a covered peril, loss of income insurance helps you stay afloat until you reopen again, providing money for wages, monthly expenses, and more.

Does Your Restaurant Need Flood Insurance?

Although the coverage provided for damage to your restaurant by flood or high water varies between companies, many policies specifically rule out this type of coverage, which necessitates purchasing a separate policy for water damage/flood damage/sewage backups, and so forth.

Work with an agent to determine if purchasing a rider or addendum to your policy is important to your business. This is particularly crucial for restaurants operating in flood zones.

Premises liability exposures are high due to public access to the premises. Serving of alcoholic beverages can impair customers' motor abilities and increase the likelihood of trips, slips, or falls. Servers move throughout the premises with trays of food and beverages, generating spills that can result in slips and falls. Spills should be cleaned up promptly. Temperatures of hot beverages must be limited to reduce injuries due to scalding.

Lists of ingredients should be posted to prevent allergic reactions. Customers may become ill from ingesting contaminated food or beverages. Cleanliness standards must be monitored. Floor coverings must be in good condition with no frayed or worn spots on carpet and no cracks or holes in flooring. Dance floors must be clean, smooth, and free of debris. Steps and uneven floor surfaces should be prominently marked. All fire exits should be plainly visible from any part of the premises and kept unlocked from the inside during business hours.

Backup lighting should be automatically activated in the event of a power outage. Parking lots and sidewalks need to be in good repair, with snow and ice removed, and generally level and free of exposure to slips and falls. Outdoor security and lighting must be consistent with the area. All employees must be instructed in proper customer handling, including how to deal with disgruntled or intoxicated customers.

Property exposures are substantial from cooking equipment, electrical wiring, refrigeration units, and heating and air conditioning systems. All wiring should be current, up to code, and well maintained. All grills and deep fat fryers must have automatic fire extinguishing protection, hoods, and filters. There should be fuel shut-offs and adequate hand-held fire extinguishers. The kitchen must be kept clean and grease free to prevent the spread of fire.

Filters should be changed frequently. Ammonia used in refrigeration units can explode. Spoilage exposure is very high. A small fire or a power outage of even moderate duration can cause all fresh and frozen goods to be condemned as unfit for consumption or sale due to the potential for contamination. If alcoholic beverages are served, the liquor should be stored in areas inaccessible to customers. Business income with extended time period coverage should be purchased. Losses can be minimized if there is an alternative location to continue operations and not lose customers. Returning to normal operations after a loss is difficult due to the lag time between reopening and returning to full income as regular customers may have moved to a new "favorite" restaurant.

Equipment breakdown exposures can be high as operations are dependent on refrigeration and cooking equipment.

Workers compensation exposures come from slips, falls, cuts, puncture wounds, burns, foreign objects in the eye, hearing impairment from noise, heavy and awkward lifting, and interactions with customers. Employees must be trained on the carrying of heavy dishes between the kitchen and the serving areas. Food and beverage handling can result in passing bacteria or viruses, resulting in illness.

While smoking is prohibited in bars in many states, others still permit this. In those states, workers can incur occupational disease from the ongoing inhalation of secondhand smoke. As with all retail businesses, hold-ups are possible, so employees should be trained to respond in a prescribed manner. Cleaning workers can develop respiratory ailments or contact dermatitis from working with chemicals. The employees in many restaurants tend to be minimum wage and turnover may be high. Company incentives to encourage long-term employment are positive signs of management control.

Liquor liability exposure can be very high in states that hold restaurants liable for injuries resulting from alcohol consumption. The type and amount of alcohol served, and the type of clientele directly impact this exposure. Failure to comply with state and federal regulations can result in the loss of a liquor permit.

There must be a set procedure to check ages of anyone attempting to purchase alcohol, as well as monitoring so customers purchasing alcoholic beverages do not then give them to patrons who are underage or intoxicated. All employees who serve alcohol should be trained in recognizing signs of intoxication. A procedure should be in place to deny serving underage or intoxicated patrons. Programs that encourage designated drivers or offer free taxi service can be useful.

Crime exposures are from employee dishonesty and money and securities. Criminal background checks should be conducted on any employee handling money. If the restaurant uses expensive cuts of meat or serves alcohol, theft of stock could be a problem. Cash receipts may be high. There must be consistent rules on cash drawer management and job assignments. Money should be regularly stripped from the cash drawer and irregular drops made to the bank during the day to prevent a substantial accumulation of cash. Closing time is the most vulnerable time so security procedures should be in place to prevent hold-ups. There must be a separation of duties between employees handling deposits and disbursements and reconciling bank statements.

Inland marine exposures include accounts receivables if the restaurant offers credit to customers, computers for tracking inventories and payrolls, and valuable papers and records for supplier and employee information. Duplicates of all records should be kept off-site. Cash registers, cooking equipment, and office equipment may have computer applications. There may be a bailees exposure from offering coat check services to customers or from storing entertainers' property. Some establishments will have paintings, statues, or other fine arts on premises.

Products liability exposure is due to food poisoning, contamination, and allergic reactions from food and beverages carried off premises for consumption. Monitoring the quality of food received, posting lists of ingredients, and maintaining proper storage temperature can reduce this exposure.

Business auto exposure may be limited to hired or non-owned liability exposures from employees running errands. If the restaurant offers delivery services, all drivers must have appropriate licenses and acceptable MVRs. Company vehicles should be used for all deliveries. Maintenance should be documented. If employees use their own vehicles, the vehicles should be checked for maintenance and upkeep.

Because most personal auto policies do not provide coverage when the vehicle is used for commercial purposes, requiring proof of insurance will be of little assistance. If the restaurant offers valet parking, garagekeepers coverage should be purchased to cover damage to customers' vehicles. MVRs and driving records should be obtained for any employee driving or parking customers' vehicles. If valet parking services are contracted to another firm, the restaurant should be named as additional insured on the contractor's policy.