≡ Menu

A Quick Insurance Guide for New Restaurant Owners

What’s as important as food in the restaurant industry?

It could actually be a number of things including the staff, the menu, or the ambiance of the venue. But in this case, it’s restaurant insurance.

Without it, you could be putting yourself and your patrons at risk, and that could sink you financially before you even have a chance to experiment with what you can cook up. 

Here’s everything you need to know about insurance and how it relates to running a food establishment…

Property Insurance

There’s a lot of equipment in your restaurant. From expensive commercial ovens to large fridge and freezer units, the bill can get big.

A commercial kitchen can run up to half a million dollars or more depending on the scale, so it’s not hard to see why you need insurance that would cover theft or damage. 

This type of insurance also protects the building itself, meaning that if there was a kitchen fire that gutted the structure, your rebuilding costs would be covered. 

Commercial General Liability Insurance

Unfortunately, mishaps will happen in a restaurant. For example, a waiter accidentally drops hot soup into a patron’s lap. A kid gets carried away with the commercial soap dispenser in the bathroom and someone slips. 

And don’t think you’re in the clear if someone gets food poisoning from your eatery, because it wouldn’t be the first time someone has sued a restaurant for this reason

Having this type of insurance can help cover the costs of defending against a lawsuit filed by a customer (or anyone else who gets hurt on your venue.)

Look for a business owner’s policy for restaurants that often combines restaurant liability insurance with property insurance.

Workers’ Compensation

This insurance is mandatory for restaurants in many states. It protects employees by covering some of their wages and medical expenses who get injured when performing their restaurant duties.

For example, a cook burns themselves badly while sauteing mushrooms. Someone cuts themselves unloading knives from the dishwasher. You’d likely be covered in these scenarios, but be sure to read over the policy first. 

You can also find policies that blend this type of insurance with the employer’s liability insurance to guard against lawsuits. 

Liquor Liability Insurance

If you plan to serve liquor, then you shouldn’t do it with this type of insurance. It protects you in the event your customers get unruly from drinking at your site and causes damage or injury. These types of incidents are generally not covered under general liability policies.

Liquor liability might cover the medical bills of a patron who was on the wrong end of a fight. It could also cover a lawsuit related to overserving patrons that lead to someone getting hurt. It might even cover the costs of the inebriated person causing damage to a third party’s property as a result. 

You might find in some areas that when applying for a liquor license that you need this insurance to qualify. 

Don’t Forget Restaurant Insurance

Securing restaurant insurance is a key ingredient to making sure your restaurant remains successful!

If you liked this article, be sure to come back often for more content about insurance or to search for a position in the industry.