A recipe for quality Restaurant Insurance

The food service industry is fast, fun, and exciting. Starting a restaurant or catering business can be overwhelming with all the different requirements and needs coming from all different directions. Restaurant insurance will help protect what you have worked so hard to build. 

While not all encompassing the policy types  listed below are a good start for any business:

  • Commercial Property
  • General Liability
  • Business Auto
  • Workers Compensation (Required in California if you have employees).

These policy types can provide different coverage’s all of which are important to your restaurant and catering business. Depending on the needs and complexities of your restaurant you may require additional types of insurance policies or coverage limits.

Commercial Property

If you own the building for your restaurant you will need to purchase building coverage. The building is a large asset and if it is damaged from a fire could be a substantial financial loss if commercial property coverage is not in place.

Regardless of whether or not you own the building where your restaurant is located you are going to need coverage for your business personal property. This will provide coverage for your equipment, furniture, utensils, and inventory.

Side note: Depending on the insurance carrier and the way your insurance contract reads some property can potentially be covered under either your building coverage or business personal property coverage portion. Always consult with your insurance advisor on how your restaurant insurance contract reads.

If your restaurant provides catering services, make sure that your restaurant insurance policy will extend property coverage while away from your restaurants location.

Other property insurance coverage’s to consider:

  • Spoilage coverage for your perishable goods.
  • Business Income coverage.
  • Inland Marine

General Liability

General liability is a very important piece to the puzzle when it comes to your restaurant insurance. It is important because it will protect your restaurant against claims of bodily injury and property damage to others resulting from your restaurants negligence.

Restaurants typically have a lot of foot traffic. The same is true for a catering business that serves at events. If a patron slips, trips, or falls it could result in a very large claim. Think of all the lawsuits that happen nowadays and the money that claimants are being awarded. The general liability coverage provided by your restaurant insurance policy is what will protect your assets and allow your restaurant to continue operating in the event of a large general liability claim.

Side note: If you are a caterer or your restaurant has catering operations and plan on serving at events, venues, festivals, and fairs you will most likely be required to provide a certificate of general liability insurance. Sometimes these entities may require that they are named additional insured.

Other liability coverage’s to consider:

  • Liquor Liability
  • Cyber Liability
  • Employment Practices Liability

Commercial Auto

If your restaurant plans on delivering to customers then you need a commercial auto policy. Commercial auto insurance will protect your business against financial losses associated with property damage and liability claims for accidents in which you are negligent.

A commercial auto insurance policy can also provide physical damage coverage for your own vehicles.

Workers Compensation

The restaurant business is fast paced and there is always a possibility of an injury occurring to an employee. Workers compensation insurance provides medical coverage and pays for other benefits to your employees if they are hurt while working. If you have any employees than the state of California requires that you carry workers compensation insurance.

Protect your restaurant

These policies are a good starting point for your restaurant insurance program. This is just the beginning though.

You should review your restaurant insurance policies annually with your insurance advisor. Your restaurant may change during the year and an annual policy review (Check out our last article titled: new years resolutions for your business) will allow you to adjust coverage limits, add coverage’s for exposures you previously did not have, and budget accordingly for the upcoming year.