restaurant insurance nj

Mistakes people make when buying Restaurant Insurance in New Jersey

Restaurants, from fine-dining facilities to fast food stops, are prone to an array of risks that make owners vulnerable to lawsuits and other expensive liability. You have to consider several factors, including the food going bad, displeasing customers, providing your employees with workers’ compensation, and natural disasters. Luckily, restaurant insurance exists, and these can help you run your restaurants without worry, securing your business income.

Here is the lowdown on New Jersey restaurant insurance, including the different coverage options, the costs, and more.

What Is Restaurant Insurance? 

It is an insurance policy designed to help restaurant owners cover all components involved when running a restaurant, including the different insurance needs of your property, supplies, employees, and customers. This policy is essential for food business owners because many risks come with operating a restaurant, from ensuring a customer’s health to the capability of the establishments to withstand structural damages.

Restaurant Insurance Coverage Options in NJ

The following are the different coverage of the standard restaurant insurance policy in New Jersey: 

General Liability

This coverage protects restaurant owners against lawsuits or liabilities related to bodily injury or property damage done by the business. Liability insurance is one of the mandatory insurance needs when operating a business in New Jersey. For instance, when a customer gets food poisoning, your liability policy would cover these costs.

Workers’ Compensation

When an employee of a food establishment becomes ill, gets injured, or dies from a work-related incident, the insurance will cover all the expenses. Workers’ compensation insurance is mandatory for most businesses in New Jersey and most states. 

Property Insurance

This policy covers all damages to your restaurant’s physical structure, in case of a storm, hurricane, or fire. The cooking equipment your workers use will contribute to the risk of fire damage and influence your insurance’s overall cost. For instance, an insurance agency may deem your business high-risk when you use deep fryers with grease.

General property insurance does not cover restaurants with a drive-thru or other additional properties that need coverage. However, an insurance agency will cover legal expenses when your building does not follow NJ’s current state code or requirements. 

Equipment Insurance

An insurance agency will cover all broken boilers, machinery, and other electronic equipment your restaurant uses. The equipment breakdown policy also covers the expenses for spoilage of food caused by power outages due to storms, hurricanes, and surges, frequent in NJ. And any costs for infectious diseases, where your employees transmit illnesses to customers due to improper hygiene.

While the standard restaurant insurance is excellent, it will most likely not cover everything your restaurant needs. Below are other coverage options that you can add to your policy: 

Commercial Insurance

If you operate a food truck or a restaurant that makes deliveries, you will need this coverage option for your company vehicles. It protects the company’s cars from vandalism and theft. The commercial auto policy also covers the damages that your driver may do when driving the company vehicle. 

Hurricane Coverage

New Jersey’s location makes it prone to natural disasters, including hurricanes. Remember that the property insurance under the standard restaurant policy in NJ does not cover damages from this natural calamity. That’s why you need to get additional coverage for the protection of your food establishment.

Flood Coverage

New Jersey experiences frequent blizzards, and when all that snow melts, the water may flood your restaurant. That’s why most insurance agencies in the state recommend getting flood insurance, especially if you think your establishment is near high-risk areas. This option covers your commercial property’s expenses when it gets damaged from natural water, including rain, snowmelt, and waves.

Liquor Liability 

A common misconception about general liability coverage is that it protects you when your workers overserve a customer who ends committing a DUI (Driving Under the Influence) or other alcohol consumption related charges. The penalties for these charges tend to be expensive, so you need to purchase a separate liquor liability policy. 

Hiring a professional from a reputable insurance agency in NJ can help you determine your specific insurance needs. Consult with your local agencies to protect your New Jersey restaurant. 

The Costs of Restaurant Insurance in New Jersey

The prices of the restaurant policy depend on the following factors: 

  • What kind of New Jersey restaurant you are operating
  • If you have employees working at the food establishment
  • If your restaurant offers a delivery service
  • If you run a drive-thru
  • If you serve liquor

However, the average rate for restaurant insurance starts roughly at $10,000 annually for a smaller restaurant and over $100,000 per year for larger food establishments, like a classic fast-food chain. You can get this policy from any insurance agency, and it is usually the cheapest and easiest way of ensuring protection for your property. Its standard package provides the most liability and property coverage you will need.

The Cheapest and Most Expensive Restaurants to Start in New Jersey

If you are looking for a safer way of establishing a food business, choosing smaller options is the best choice. A food truck or corner stand will save you lots on coverage costs, averaging around low thousands annually. However, if you have the budget and want to start big, you can build a large dine-in restaurant or fast-food chain with several employees. Opting for this one can bring your insurance coverage over $100,000 annually.

Hiring an Agent from an Independent Insurance Agency

Insurance policies are usually difficult to understand, and it is often a lengthy process when you are trying to find the right insurance for your establishment. Fortunately, there are now numerous local insurance agencies in New Jersey that can help you sift through the available options and choose the best coverage options for your restaurant. Professionals from these companies will also find the best deals for you by comparing insurance quotes from different carriers.

Call your local insurance agency to get the best deals and find the right policy for your restaurant, ensuring the smooth flow of income.

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