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Restaurant Insurance Basics

Summit Insurance Advisors


by Michael Harbron on Jul 02, 2018

While there are hundreds of details to pay attention to when it comes to running a restaurant, one of the most important is insurance. One little thing – a leaky pipe, a grease fire, or a power outage – can wreak havoc on your business and without insurance coverage, it could cost you a great deal more than just some “clean up time”. It could cost you the business. However, the right type of coverage can save you a good amount of money, time, and grief. Still not sure you need insurance for restaurants? Consider these facts:

  1. Around 5,900 restaurant fires occur each year, resulting in almost $250 million in property loss.
  2. More than 3 million restaurant employees slip and/or fall annually, with an average cost of $21,000 per instance.
  3. Identity theft is a huge risk for businesses in high turnover industries. Whether it’s theft of an owner’s identity by an employee or lackadaisical handling of employee paperwork, a business could be found liable for damages resulting from identity theft.
  4. Cleaning chemicals that are mixed incorrectly expose staff and customers to toxic fumes, leading to liability claims against restaurants several times each year.
  5. Power outages and natural disasters occur in every part of the country at any time, without warning. These can leave devastating impacts on restaurants.
  6. One lawsuit from a customer, employee, or anybody else could be enough to decimate your business, forcing you to permanently close your doors.

What does restaurant insurance cover?

Insurance could cover financial obligations of the restaurant in all of the above situations, along with many others. There are many coverage choices and combinations available in order to suit the unique liability needs of various establishments. A taco truck, for example, would have different insurance needs than a banquet center; options include things like excess liability, workers compensation, general liability, commercial auto, and many others.

  • General liability is like an umbrella policy that can cover you in the event of someone slipping and falling, someone becoming ill after eating at your restaurant, and the like.
  • Property coverage is going to protect your building in the event of a fire or other issues; however, you may need specific peril insurance to be covered in the event of a flood or earthquake. (Talk to your insurance professional to learn more.)
  • Another type of coverage is liquor liability, which is required in most states if you serve liquor to keep your license in good standing.
  • Protect your restaurant vehicles with coverage – this is a must if you have food trucks or other company vehicles or if you offer catering.
  • Business crime coverage will protect you from losses from robbery, breaking and entering, forgery, and theft.

After learning about some of the biggest and most common threats to restaurants, you need to ask yourself if you can afford to NOT have restaurant insurance. The simple fact is that with a custom insurance policy, the cost for coverage can be surprisingly affordable and what’s most important is that it can be the difference between your business surviving a mishap and your business folding forever because of one. Contact our insurance experts for assistance and get a no-obligation quote online for restaurant insurance today.


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