Restaurant Insurance

Restaurant Insurance: Cost, Benefits, & Who Needs It

Restaurant owners know that running a restaurant is challenging but can be very lucrative. As you build your business, having the right restaurant insurance is important to protect your finances.

Restaurant liability insurance can help you cover unexpected costs and even help you stay open in case something bad happens. For example, restaurant insurance can help you cover replacing spoiled food or a lawsuit from a customer who got sick after eating at your place.

Restaurant owners face specific challenges, but the good news is that they don’t have to worry about the right coverage. 

What’s the best restaurant insurance for your business? How much does it cost? What are the benefits?

Here’s everything you need to know about business insurance for restaurants.

What Does Restaurant Insurance Cover?

Customers and a cook taking food from a buffet.

Restaurant insurance coverage varies widely, but these are the specific types of coverage you need.

General Liability Insurance

General liability insurance is one of the most important policies in the restaurant business. As an owner of a restaurant, you are always at risk of being sued if someone says they got sick from your food. 

General liability insurance is a type of restaurant business insurance that can also protect you if someone gets injured at your restaurant or if you are found liable for property damage to a third party. 

Business Owners Policy

A Business Owners Policy or a BOP can cover a settlement or lawyer fees in case you need them. Furthermore, a BOP also includes commercial property insurance that covers damage to kitchen equipment and the restaurant building if you own it. 

Business Interruption Insurance

Business interruption insurance helps you replace lost income and other expenses if you can’t open your business because of an issue covered by your policy (for example, a fire).

Commercial Crime Insurance

Commercial property insurance usually doesn’t cover crime-related issues such as burglary, forgery, and robbery. That’s why you may need commercial crime insurance to cover these issues.

Food Contamination Endorsement

This type of policy covers expenses such as lost income, medical tests, and equipment cleaning in case your restaurant is shut down due to a foodborne illness outbreak. Food contamination endorsement also covers advertising to help your business restore your restaurant’s reputation.

Liquor Liability Coverage

Liquor liability insurance covers property damage and bodily injury caused by drunk customers who were served liquor at your business.

Mechanical Breakdown

This policy covers the cost of repairing the breakdown of the machines at your restaurant (for example, electrical machines and boilers).

Workers’ Compensation Insurance

Workers’ comp insurance can help you cover the costs of medical bills, lost wages, disability, and even death benefits if your employees get sick or injured while performing their job. 

Read Next: The Ultimate Guide To Business Insurance

Other Types of Restaurant Insurance You May Need

Commercial Auto Insurance

As a business owner, you will need commercial auto insurance if you drive a car for business purposes. This commercial insurance for restaurants includes liability coverage covering property damage and injuries you might have caused to others.

Cyber Liability Insurance

Suppose your restaurant becomes the victim of a data breach or cyber extortion. In that case, cyber liability insurance can help you cover expenses such as data recovery and lawsuits due to privacy breaches. 

Who Needs Restaurant Insurance?

If you are an owner of a restaurant, you should consider having liability insurance for restaurants. Other business types include:

  • Coffee shops
  • Diners
  • Bars
  • Delis
  • Taverns
  • Food delivery services
  • Pizzerias
  • Fast food franchises

Do you have a restaurant in New Jersey? Read the full guide to Restaurant Insurance in New Jersey

Why Do I Need Restaurant Insurance?

Having a restaurant means that your business is your source of income. So if something happens and your restaurant has to shut down, or you get sued by a customer, you need to think about how to survive financially.

Restaurant insurance is one of the best ways to protect your business and make sure you can recover financially in case of an unexpected event that could destroy your business.

Additionally, restaurant insurance covers you in case someone sues you. 

How Much Does Restaurant Insurance Cost?

The cost of restaurant business insurance is typically about $175 per month for a BOP with $1 million in liability insurance. The cost of your policy depends on several factors, including:

  • The type of business you own
  • Business location
  • The amount of coverage you need
  • The value of your business’s property

What Does Restaurant Insurance Cover For Food and Beverage Businesses?

If you choose East Insurance Group for your restaurant insurance, you will get a breakdown of the coverage your business needs because we know that every business is different and needs different types of coverage. 

Here are some coverages you might need if you opt for restaurant insurance:

  • Power outage
  • Stolen cash
  • Contaminated food
  • Employee dishonesty
  • Cyber attacks
  • Destroyed billing records
  • Business interruption

What Kind of Insurance Should a Restaurant Have?

A general liability policy is one of the best insurance options for restaurant business owners who want to protect their finances with restaurant insurance. The reason is that this policy covers you in case someone gets sick from eating food at your restaurant or they decide to sue you.

Do Restaurants Need Public Liability Insurance?

Since public liability insurance can cover you in case, a customer makes a claim against your business, this type of policy is one of the most recommended types of insurance policies for restaurant owners. 

Are you still confused about restaurant insurance, or do you need some help getting a quote for your business? Contact us today and get all the information you need fast and for free!