Running a restaurant is all about dedication to amazing food. Whether the restaurant has been a neighborhood icon for decades or just opened its doors, customers expect its food to delight their senses and take them on a culinary journey. However, that is only one ingredient of the recipe for success. Knowing how competitive and fickle the restaurant industry is, you also need to take good care of the business side, which includes finding the proper insurance.
There are dozens of different policies and packages on the market. To understand the various types of restaurant insurance, why you need it, and how to save some money on it, continue reading this article.
Running a restaurant comes with a unique set of risks: from food poisoning to knife injuries in addition to all the risks that can affect any business. It is important to get insurance that covers the unique needs of a food business.
Although there is no specific type of insurance called “restaurant insurance,” many insurance companies bundle together applicable insurance policies under this name to make it easier and more convenient for restaurants to get all the policies they are most likely going to need.
Some policies in those packages are primarily applicable to the food industry, such as spoilage insurance or food contamination shutdown insurance.
As mentioned, running a restaurant comes with many risks. While it is important to have optimism regarding the future, it is not realistic to expect that every customer is going to leave with a smile on their face. Moreover, it only takes one unfortunate incident to financially ruin a business.
A grease fire can ignite and spread through your flues, a customer can get food poisoning, or a waiter can scald their leg after dropping hot drinks. The business owner is liable for all of them. They may even lead to a lawsuit. Without adequate insurance, you are going to have to pay for all the damages.
When running a restaurant, you need several policies. Here is an overview of the most important ones:
Commercial Property Insurance
A restaurant’s premises are one of the most valuable assets the business possesses. Whether rented or owned, commercial property insurance will cover damage to the building in the event of a fire, vandalism, or other disasters. However, it will not cover earthquakes and flooding. It will also include most of the building's contents, up to the limits of the policy.
General Liability Insurance
General liability insurance covers bodily injury or property damage to a customer, including food poisoning, irrespective of blame. It will also provide funds in the event of a lawsuit or out-of-court settlement.
Business Owners’ Policy (BOP)
A BOP is a combination of commercial property insurance and general liability insurance, rather than purchasing the two policies separately. This will be the best option for most restaurants.
Workers’ Compensation Insurance
In the event that an employee becomes injured or ill because of their work, they will be liable for sick pay, medical fees, and can even file a lawsuit. If this were to occur, the insurance company would cover the costs, irrespective of blame.
Restaurant Crime Insurance
Crime can take many forms: employee dishonesty, theft, counterfeit currency, forgeries, and more. These can be covered under crime insurance or another similar policy. Additionally, consider cyber liability insurance if you have a significant online presence.
In addition, to the above-listed insurance policies, there is a range of different insurance policies specifically geared towards restaurants. These include:
Purchasing insurance can feel like an expensive endeavor; however, it can save you a fortune in the long run. But you should still consider trying to save money on individual policies. Here are some tips to consider:
If your restaurant business is still without insurance or you are thinking of switching the existing one out, you can consult our experts by sending us an email or filling out the free quote form on our website.
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