If you own a restaurant, cafe, bar or even food truck, you already know the extremely challenging circumstances you face post pandemic.
From soaring inflation prices to the difficulty of hiring workers, the obstacles facing restaurateurs are unprecedented. With cutting costs imperative to keeping your restaurant’s doors open, you might be wondering what’s a fair price for restaurant insurance?
In this Restaurant Insurance Costs Guide, we’ll list the different types of restaurant insurance policies you might need, and we’ll give you an idea of average monthly and yearly premium costs. Lastly, we’ll show you how to save up to 20% in premium costs.
Average Restaurant Costs In 2024
| Type of Insurance | Liability Covered | Average Annual Premiums | Average Monthly Premiums | Cost Range | Average Deductible |
| General Liability Insurance | Injuries to third parties | $1,575.00 | $125.00 | $1,000.00 to $7,000.00 | $500.00 |
| Commercial Property Liability Insurance | Damage caused by a covered event to Business equipment, inventory, food spoilage and building itself if you own it | $950.00 | $80.00 | $950.00 to $5,000.00 | $500.00 |
| Workers’ Compensation Insurance | Injury to employees performing work related duties | Based on Payroll and type of Employee $0.80 to $2.50 per $100.00 of payroll |
$175.00 | $2,000.00 Per year for every $100,000.00 in Payrol |
$1,000.00 |
| Liquor Liability Insurance | Cover claims of bodily injury or property damage that an intoxicated customer causes | $1,000.00 | $85.00 | $800.00 to $5,400.00 | $1,000.00 |
Source: Data collected by Farmer Brown Insurance
General Factors That Influence Cost
- Square footage of your location – The larger the space, the higher the insurance cost.
- Type and age of building – Older buildings and wood structures are more expensive to insure than modern fire-resistant buildings.
- Type of fire and security system – If the security and fire prevention systems are present insurance costs are lower
- Projected sales and number of customers – The more sales and customers you have, the higher the premiums.
- Value of inventory, equipment, and technology – The higher the value of the build-out and inventory the higher the premiums.
- Number of employees – The more employees, the higher the worker’s compensation premiums.
Restaurant Insurance Coverage
General Liability Insurance
A low-cost Restaurant General liability insurance is the most basic type of insurance that every restaurant needs. It protects you and your business against lawsuits, accidents, and mistakes. Without coverage, you would have to pay these amounts from your own pocket.
What coverage can general liability provide for food and beverage businesses?
Customer injuries- When a customer gets hurt on your property, general liability insurance will pay for everything from an ambulance ride to the cost of a lawsuit if your business is sued and it is a covered claim. General liability insurance covers:
- Legal defense costs, including attorney fees.
- Medical expenses incurred by the injured party.
- Court judgments or settlements.
- Funeral costs in fatal incidents.
Customer property damage
General liability insurance also protects you when customer property is damaged. If a server spills a drink on a customer’s fur coat, your general liability policy could help pay for:
- Legal fees if you are sued.
- The cost of replacing the fur coat.
- Any out-of-court settlements.
General liability insurance can also protect your food service business from off-site incidents.
Advertising injuries
It is always possible to inadvertently copy a competitor’s catchphrase or logo. Advertising injuries are covered by general liability insurance. That includes:
- Copyright infringement.
- Defamation, both libel and slander.
Commercial Property Insurance
Owning and running a restaurant is a challenging endeavor that requires a large initial investment. So you will want to be sure to protect yours with affordable restaurant insurance that reduces your financial risk.
You have just made a substantial investment in your business. You need to protect your property and investment. The following types of coverage will be available with your Restaurant Property Insurance policy.
Building coverage
This is necessary if you own the building in which your establishment is housed. It will provide coverage for damages to the structure of the building.
Contents coverage
This provides coverage for the property kept inside your restaurant even if you do not own the building. It is similar to the coverage you would have on your home. Special items or expensive items may require special endorsements to cover these items. This also covers your build out which in most cases is pretty expensive.
Equipment breakdown coverage
If you have cooler problems or kitchen equipment breaks down you can opt for this coverage. This coverage will compensate you for repair fees as well as lost income.
Food spoilage coverage
One of the biggest problems that restaurants deal with is food spoilage. If you have products that are worth thousands of dollars, would you be able to afford them if you lose it all in one night?
An extended power outage or mechanical breakdown could cause you to throw away a lot of food. Obtaining this coverage is not expensive, and it’s smart to protect your investment, so you should get a good insurance policy.
Lost income coverage
If your restaurant is forced to close temporarily because of a covered event, this insurance will provide a continuation of income. Business interruption insurance is a type of insurance that covers the loss of income that a business suffers after a disaster.
The following are typically covered under a business interruption insurance policy:
- Profits that would have been earned (based on prior months’ financial statements.
- Operating expenses and other costs that are still being incurred by the property.
- Temporary Location. Some policies cover the extra expenses for moving to, and operating from, a temporary location.
- Extra Expenses. Covers expenses that allow the business to continue operation while the property is being repaired
Theft Coverage
No one is exempt from suffering a theft, that is why we advise you to not 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.
Workers Compensation Insurance
Workers’ Compensation Insurance provides benefits to employees injured while performing duties required by their job. These benefits are provided no matter if the employee or employer was at fault in causing the injury. State law determines how and what benefits are available to an injured worker.
Liquor Liability Insurance
Liquor liability insurance, often called Dram shop insurance, helps protect businesses that sell, serve, or distribute alcohol. So, if you are selling alcohol at your establishment, you will need this coverage to protect you 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. This is a specific type of liability insurance that covers property damage or physical injuries caused by patrons who have become intoxicated at your bar.
Commercial Auto Insurance
Commercial Auto Insurance provides coverage for cars and any other motorized vehicles that are used for business purposes. It includes most of the same coverage as standard auto insurance.
Commercial Auto Insurance is generally more expensive than personal car insurance. There are ways you can qualify for discounts just like with your regular personal policy.
Get A Restaurant Insurance Quote Today
If you want policy advice or an exact cost for a restaurant insurance, we encourage you to get in touch with us.
Why work with us?
Many insurance agencies are equipped to deal with only the most basic insurance coverage, like general liability, auto insurance, and worker’s compensation.
We understand restaurateurs and the immense risks they take when they provide their necessary services. In return, we help them find the rates and policies that work for them. Our agents can reduce the prices through additional discounts of 10% to 15% from the instant quotes you receive, so please take the time to call us to review your quotes.
We provide the finest Comprehensive plans for your restaurant business by providing:
- Licensed insurance agents that are knowledgeable
- Same-day coverage in most instances
- Coverage from A-rated insurance companies
- Ability to offer policies nationwide
- The lowest price for the best Restaurant Insurance coverage in the industry
