No matter how hard you work to ensure that everything goes smoothly, problems can arise in a restaurant. Restaurant owners have exposure to a wide range of risks that make them vulnerable to liability and financial losses. Restaurant insurance differs from other types of business insurance, as it is designed to handle the unique risks faced by business owners in the food sector.
What types of coverage should be included in a restaurant insurance policy?
Food companies need insurance to protect them from various risks. Types of coverage that you are likely to need may include:
- Company Ownership Policy (BOP): This insurance combines commercial real estate and liability insurance in one policy. It helps protect the property on which your restaurant is located, including your building, equipment and signs, and it also provides coverage for liability to customers and staff.
- Employee Compensation: If your restaurant employs workers, you are probably required by law to have workers' comp insurance. This cover is designed to protect your employees in the event of work-related injuries or illnesses and to protect you from lawsuits based on workplace injuries.
- General Liability: This basic coverage can provide protection against lawsuits due to accidents and mishaps that occur on your property, such as grinding and fall accidents. It can also protect you from liability for damage to customers' vehicles if you offer serviced service.
- Professional responsibility: This protects your business if someone falls ill from eating spoiled food products served in your facility.
- Business Income: Your restaurant business could suffer a significant financial loss if a key salesperson suddenly could not deliver what you needed to keep your business going. Insurance income coverage provides protection against loss of income in the event of a covered loss.
- Commercial car: If you offer a food delivery service, you need commercial car insurance for the company's owned vehicle. If your delivery drivers use their own vehicles, you need rented and non-owned auto protection coverage.
- Alcohol liability: Every establishment that sells or serves alcoholic beverages has exposure to liability if a customer under the influence causes bodily injury or property damage. Liquor insurance can help cover your legal costs and any damages that arise as a result of such an event.
- Coverage of employee theft: Food and money are both readily available to restaurant workers. Coverage of employee theft can help compensate you for financial losses if an employee steals from your company.
- Food contamination / destruction coverage: A power outage, equipment breakdown or other events may result in food being destroyed or contaminated. This coverage can help replace the spoiled food.
- Employment Liability Insurance (EPLI): Like other employers, restaurants are sometimes sued by employees who make wrongful dismissal, discrimination, sexual harassment or other employment-related allegations. EPLI insurance can provide protection against such lawsuits. You may also want to add third-party coverage to handle claims made against your company by customers or suppliers based on acts committed by your employees.
If you have a restaurant business, our helpful local agent can work with you to ensure you have the coverage you need to fully protect your business at the best available prices.