Restaurant Insurance: What Budding Restaurateurs Need to Know



As you embark on your career as a restaurant owner, you’ll no doubt be hugely motivated by serving delicious food in convivial surroundings. That’s perfectly understandable – you’re likely choosing this industry out of a passion for dining rather than any expectation of great riches. However, the restaurant business is one of the most cut-throat there is, and if you want to stay around for the long term then less exciting business considerations are just as important as the creations of the kitchen.

Restaurant insurance won’t set many pulses racing, but it’s a topic no restaurateur can afford to overlook, whether you’re running a small family bistro or a franchise of a national chain. Of course, any business needs insurance protection of some kind, but what’s special about restaurant insurance? These are the areas a typical policy covers:

Public or General Liability

General liability cover is an essential for any business which deals with the public. If anyone comes to harm while on your premises, or as a result of your services, then it’s wise to be prepared for legal action. As part of this, you need the protection of insurance to cover any potential compensation. In terms of restaurants, there are special issues such as food poisoning or the spilling of hot drinks to consider, or even the risk of serving food allergens to a sufferer by mistake. Restaurant insurance will cover all these circumstances and more.

Workers’ Compensation

You also need cover for your employees, both kitchen staff and front-of-house. Kitchens can be dangerous places, and accidents can happen even with the most robust precautions. Workers’ compensation will cover medical costs and wage replacement for any employee who suffers a mishap, as well as providing some protection against any subsequent legal action.

Liquor Liability

If your restaurant serves alcohol, then liquor liability is a must. If a customer becomes intoxicated and goes on to cause an accident or otherwise get into trouble, you could be held partly responsible and be left open to compensation claims. A good restaurant insurance policy will make provision for this.

Food Contamination Insurance

A restaurant relies on refrigerators and freezers to keep much of its inventory in usable condition, and a power cut can, therefore, be disastrous. Food contamination insurance will compensate for the loss of stock for this or similar reasons.

Business Interruption Cover

A restaurant’s profitability also relies on quick turnover of inventory. If business is interrupted for any reason beyond the owner’s control, losses can quickly mount as the value of stock degrades. Restaurant insurance will include an element of cover for this.

Life Insurance

Your restaurant may be your most valuable asset, but if you’re no longer around, will your family have the knowledge and experience to keep it running profitably? Including life coverage in your restaurant insurance policy will help provide for your dependents should something happen to you.

Property Insurance

As with any other business, damage to your premises through fire, flood, or other disasters will be hugely disruptive. However, relocating a restaurant to new, temporary premises is much more difficult than with many other business types, and your insurance cover should take account of this. Also, the nature of a professional kitchen means that fire and flood damage is a greater risk, and regular property policies may specifically exclude restaurants for this reason.

Other options may also be included in a restaurant insurance policy, such as specific peril cover to protect against so-called acts of god, or automotive insurance to cover any vehicles and drivers necessary for running your business. An experienced and impartial insurance broker will be able to help you set up a policy that takes account of your restaurant’s individual risks and requirements.

Running a profitable restaurant relies just as much on sound business considerations as it does on the more glamorous aspects, such as an exciting menu. Insurance may not be the most thrilling of topics, but it’s an essential one to get right if you want your restaurant to stand on solid foundations and grow into the future.

We understand your risks and challenges, and will help you create a policy that fits your specific needs.Interested in learning more? Connect with an agent in your neighborhood here.


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