Understanding Restaurant Insurance for Small Businesses

Restaurant insurance protects your small business from liability claims, property damage, and interruptions to operations from unforeseen events. An experienced insurance agent can assess your risks and customize a policy that provides adequate coverage. Here is more information about the types of insurance your restaurant may need:

General Liability Insurance

General liability insurance covers legal expenses, medical expenses, and damages related to bodily injury or property damage claims made against your restaurant. This includes incidents such as slips and falls, food poisoning, or accidental damage to a customer’s property. If your restaurant is sued, this coverage pays for attorney fees, court costs, and settlements.

General liability insurance may also provide coverage for personal and advertising injury claims. This includes claims of libel, slander, copyright infringement, or invasion of privacy arising from your restaurant’s advertising or marketing activities. Maintaining a safe and clean environment, training staff in food safety and customer service, and inspecting premises for hazards can mitigate risks and lower your premiums.

Liquor Liability Insurance

Liquor liability insurance covers legal expenses and settlements for claims arising from incidents involving intoxicated patrons who were served alcohol at your restaurant. These claims include bodily injury, property damage, or other harm caused by the actions of intoxicated individuals. Liquor liability insurance may extend coverage to your restaurant’s employees who serve alcohol. This protects them against claims related to alcohol service.

Liquor liability premiums depend on the size and location of your restaurant, the volume of alcohol sales, and claims history. Restaurants with higher alcohol sales volumes have greater exposure to alcohol-related risks, such as intoxication, fights, and accidents, potentially increasing premiums. Smaller restaurants with lower occupancy capacities may pay reduced premium costs because of their minimal exposure to risks and liabilities. Restaurants with a clean claims history and a proactive risk management strategy may qualify for lower premiums or discounts from insurers.

Property Insurance

Property insurance covers the physical structure of your restaurant, including the walls, floors, roof, and foundation. This coverage is for damage or destruction caused by accidents or natural disasters such as fire, lightning, windstorms, hail, explosions, or vandalism. Property insurance also covers the repair or replacement costs for restaurant equipment. This equipment includes cooking appliances, refrigeration units, HVAC systems, ovens, and dishwashers.

Property insurance protects restaurant furniture and fixtures that may become damaged. This form of restaurant insurance also covers exterior signs, banners, and displays that have been damaged or lost. Restaurants can pursue reimbursement to replace their damaged or stolen inventory, including food and beverage supplies, ingredients, and packaged goods.

Workers’ Compensation Insurance

Workers’ compensation insurance covers medical expenses related to work-related injuries or illnesses. This includes the costs of doctor visits, hospital stays, surgeries, and medications. Workers’ compensation provides coverage for lost wages if the employee cannot work due to injury or illness. It also covers rehabilitation expenses, such as vocational training, physical therapy, and occupational therapy. This enables workers to resume work within a reasonable period.

Workers’ compensation insurance may provide disability benefits to employees who suffer permanent, partial, or total disability due to workplace injury or illness. Employees who are injured or ill must report the incident to their employer and file a claim. The employer then submits the claim to their insurer, who evaluates the claim. The insurance company will then approve or deny coverage for medical treatments and compensation for lost wages.

Invest in Restaurant Insurance

Restaurant insurance protects against financial losses, liabilities, and risks associated with owning, operating, or interacting with restaurants. A qualified insurance agent will tailor insurance coverage to match the specific risks facing your small business. Insurance agents may also offer risk management advice and best practices to help your restaurant minimize its exposure to risks and liabilities. Contact a reputable insurance agent today to learn more about purchasing coverage for your restaurant.