Hot surfaces. Sharp knives. Foodborne illnesses. Patrons coming and going on a daily basis. Restaurant owners face a multitude of risks that are specific to your industry. And that’s in addition to the typical concerns most small businesses must prepare for like property damage to your premises or loss of important customer, vendor, or employee files and records. Learn about the small business insurance coverages restaurant owners like you typically need.
Business Owner’s Policy
Most restaurants have a Business Owner’s Policy (BOP). Why? Because a BOP can help protect your restaurant business in much the same way a homeowner’s insurance policy protects your home and personal belongings.
By combining three basic insurance coverages that are important to almost every small business, including restaurants, a Business Owner’s Policy can help cut the cost of your insurance rates while helping protect the restaurant business you’ve worked so hard to create.
- General Liability – helps protect your restaurant from certain lawsuits alleging injuries or property damage that occurred as the result of your business operations. For example if a patron trips and is injured while walking in your restaurant, or a server spills food and ruins a patron’s jacket. It even helps cover certain claims of slander and libel against restaurant owners. Business Liability insurance does not cover liabilities directly arising out of the professional services your restaurant may provide.
- Commercial Property – helps cover the physical location of your restaurant and the tools used for running your restaurant business, like ovens, stove tops, plates, and utensils – whether you own or lease them.
- Business Income – helps cover the loss of income when you can’t run your restaurant or food business because of covered property damage.
A Business Owner’s Policy also provides an easy way to purchase additional optional coverage that can be tailored to your restaurant or food business.
Easily Add Optional Insurance Coverages to a Business Owner’s Policy
Restaurants often collect sensitive employee and customer information that could include bank account, credit card, and Social Security numbers. If that information is lost or stolen, it could leave your restaurant business vulnerable to lawsuits and a damaged reputation.
Data Breach Coverage helps pay the costs of notifying impacted individuals managing public relations, good faith advertising, and more if personally identifiable information is lost or stolen from your restaurant or food business.
You're careful when you serve liquor in your restaurant, but sometimes a customer may drink too much and start a fight or cause an accident. Liquor Liability Coverage can help with your legal costs, court fees, and civil damages resulting from the sale of liquor at your restaurant.
Your restaurant depends on proper food storage but your refrigeration system may suffer a mechanical breakdown which may cause all perishable products to spoil. This coverage helps cover the cost to replace the lost stock.
Business Income from Dependent Properties
If your restaurant depends on a third party to deliver goods and services and a change in their operation causes your business to lose income, Business Income from Dependent Properties coverage may help replace that lost income. For example, if your restaurant generates a large percentage of its revenue from a certain menu item and delivery of those ingredients is delayed due to a shipping error by the manufacturer, this coverage may help replace the income your restaurant loses as a result.
Franchise Upgrade Coverage
As part of your franchise agreement, franchise restaurants are often held to certain standards with regard to the type of equipment they may use to operate your business. If your equipment is damaged due to a covered loss and your franchiser requires it be replaced with an upgraded model, Franchise Upgrade Coverage may help cover the costs to upgrade the damaged property to franchiser standards.
Other Important Insurance Options for Restaurant Businesses
Workers’ compensation insurance coverage is required by most states and can provide benefits to your restaurant employees for work-related injuries or illnesses. Benefits include medical care, wages from lost work time, and more. And if the worker’s family should decide to sue you, workers’ compensation insurance coverage can help you with related legal fees.
Commercial Auto Insurance
Do you use your car to pick up food, restaurant supplies, dishware, or cleaning products, to attend business meetings, industry conferences, or more for your restaurant business? A Business Auto Policy provides coverage typically not included in a personal auto insurance policy. It can cover you or an employee when a personally owned vehicle, used for business purposes, is involved in an accident.