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Restaurant Liability Insurance
If you own a restaurant, you need an insurance policy that provides the best coverage. With this, you can have the peace of mind that your business is protected, allowing you to focus on providing your diners with the best experience possible.
In this article, we will discuss everything related to Restaurant Insurance.
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What type of coverage do you need for your restaurant?
It’s a special type of Business Owner’s Policy designed for restaurants. A BOP is simply a combination of Liability and Property Insurance for your business’s specific needs.
Restaurant Insurance Cost
Restaurant Insurance starts at $500. However, as for any business, the insurance cost varies greatly. To get an accurate number for your restaurant insurance policy, you can fill out the form above and receive a free quote.
The factors that affect the premium are as follows:
The more money the business makes, the more work you do, which increases the chance of a claim.
In certain situations, you may run into potential problems that require you to have higher liability limits. The higher the limit needed to meet contractual terms, the higher the premium. It is important to remember that these costs should be passed on to the customer.
Like your personal auto insurance, the more claims you have, the more you will have to pay for your Restaurant Liability Insurance.
Location of Business
Your business’s location significantly impacts insurance costs because states with more regulation cause premiums to rise.
Size of your company
The more people you have working for you, the greater the chance of a claim.
What Type of Coverage do You Need for Your Restaurant?
At Farmer Brown, we work closely with you to design the right restaurant insurance program to fit your needs. Our professionals can help you navigate the insurance maze as your coverage becomes more complex.
Nevertheless, here are some of the relevant policies for restaurant owners:
Property insurance covers you in case of fire or burglary within your premises. Any loss that occurs in this way will be compensated, helping you avoid significant losses and allowing you to rebuild your business.
If you rent the establishment, you need to talk to your landlord about the contract specification regarding property insurance and determine who will be responsible for what. However, you must ensure the money you invested in building your restaurant is covered, and that’s the purpose of a Tenant Improvements & Betterments policy.
But if you own the building, it’s always a good idea to ensure it to the correct amount of replacement cost in case of a significant loss like a fire.
Personal Property Coverage
Insuring your personal property will help to rebuild your business in case of loss. It will cover you for what’s inside your restaurant in case of peril. In other words, you will have coverage for your tables, chairs, kitchen equipment, etc.
Remember to take pictures of your items and ensure you have a clear idea of the price so you can get the appropriate coverage.
A commercial auto policy is a must if you use a vehicle for take-outs or other business-related activities; under those circumstances, your personal auto policy would not cover any accident.
This applies to third parties within your premises, such as customers. They are liable for compensation if they get hurt or get food poisoning while in your restaurant.
General Liability Insurance is a must-have to protect yourself from this financial cost of Liability insurance will take care of your defense and settlement expenses.
Liquor liability Insurance
Most restaurants serve alcohol separately. If you serve alcohol at your establishment, you need liquor insurance coverage in addition to your beer or liquor license.
So, if you are selling alcohol at your establishment, you will need this coverage to protect against the actions or eventualities caused by intoxicated people on your premises. This policy will be based on your gross liquor sales and the coverage limits you need.
Now, nobody likes to think about the idea of having a dishonest person working for you, but unfortunately, it happens. No one is exempt from suffering a theft. That’s why we advise you not to disregard this coverage to protect your investment and, in the worst-case scenario, be able to recover what you lost due to a dishonest person.
Employee theft coverage is essential to have, along with Employment Practices Liability Insurance. This last coverage is for hiring and firing employees and covers sexual harassment.
A chef has a constant risk of burn injuries, and servers are prone to falls. Because their safety is essential, you must provide Workers’ compensation insurance to cover medical expenses for any work-related injuries.
Food Contamination Insurance or Spoilage Coverage
Since restaurants buy food in bulk, they rely heavily on refrigerators and freezers to keep the food fresh. Power loss for long hours may cause these foods to go bad or cause losses. Food contamination insurance compensates the owner in the event of such a scenario, eliminating that genre of loss as a part of the restaurant’s financial vulnerability.
Food spoilage is crucial coverage for when your food goes bad, which could be a considerable expense depending on the type of food you serve. Imagine 50 steaks going bad; that is a horrible day as a restaurant owner.
Power Outage Coverage
Since restaurants buy food in bulk, they rely heavily on refrigerators and freezers to keep the food fresh. As power loss for long hours may cause these foods to go bad or cause losses, you must ensure that you can replace the products to continue with your business.
For example, if you have fish or raw meat products in your fridge, keeping the cold chain for each product is essential for safe consumption. Therefore, the policy must protect you when you lose power in your power box or from the power station because both can significantly impact your operations.
Business Interruption Insurance, also known as business income insurance
It is a type of insurance covering the loss of income a business suffers after a disaster. These amounts can be significantly larger than the initial claim itself. Take, for instance, a small kitchen fire that damages a small portion of your kitchen. The damage claim may only be $50,000, but your restaurant may be closed for months due to clean-up and repairs.
The income loss coverage may be due to the disaster-related closing of the business facility or the rebuilding process after it. It differs from property insurance because it not only covers the physical damage to the business but the additional coverage for the profits that would have been earned.
This coverage is not sold as a stand-alone policy but can be added to the business property insurance policy.
The following are typically covered under a business interruption insurance policy:
- Profits: Profits that would have been earned (based on prior months’ financial statements.
- Fixed Costs: Operating expenses and other costs still incurred by the property (based on historical prices).
- Temporary Location: Some policies cover the extra expenses for moving to, and operating from, a temporary location.
- Extra Expenses: Reimbursement for reasonable expenses (beyond the fixed costs) that allow the business to continue operation while the property is being repaired.
Loss of Income coverage is critical coverage. After a disaster, the cost to repair the damage is one expense, but you are also losing your daily income. Your employees still need to be paid, so this policy covers your daily loss of income and EXTRA expenses.
If you have a coat check-in, you can imagine giving the wrong mink coat to a customer could be a very costly mistake. Bailees Liability is specific coverage for such a case and any other that involves damage to the customer’s property while under the care of a bailee.
It’s a policy that can be added to protect your business if you provide valet services.
Why choose Farmer Brown Insurance Agency?
We are a professional insurance broker that specializes in restaurant business insurance. With a history of providing comprehensive coverage for the restaurant industry, we can craft a unique policy that covers all your insurance needs.
Having a productive and profitable restaurant is demanding. You need the best equipment, the best personnel, and the best insurance. We offer total restaurant insurance solutions, so you can concentrate on meeting your customers’ needs.
Put our experienced team to work to help you identify your exposures and how to best address them. Obtaining this coverage is not expensive, and it’s wise to protect your investment, so get good Restaurant Insurance now.