Getting restaurant insurance coverage protects your restaurant and, in most cases, – the properties therein. Depending on the type of coverage you go for, the policy can also cover your employees.
In this article, you will find out how the restaurant insurance coverage works, as well as the common types of restaurant insurance coverage to get for your restaurant.
What is Restaurant Insurance Coverage?
This is a type of insurance policy is only for restaurant owners. The policy covers the property upon which the restaurant is housed. It also covers unexpected financial losses, such as when an appliance is damaged or stolen.
The restaurant insurance coverage can also cover the restaurant owner from lawsuits, especially when a customer files a lawsuit over unsatisfied service delivery.
What is Covered?
The restaurant insurance coverage covers the following:
1. Business Property
This includes coverage for the property housing the restaurant. The policy also covers the business equipment and furniture. Items like chairs, refrigerators, tables and ovens are covered by the policy.
Defense for Covered Liabilities
Running a restaurant business comes with twists and turns. You don’t want to encounter challenges and have no means to address them.
With the restaurant insurance coverage, you can conveniently attend to some of these challenges. For example, the policy covers the defense costs for covered liabilities. This comes in handy when issues like a customer getting sick from food contamination or someone getting hurt on your property happens.
The Top Types of Insurance for Restaurants Your Business Needs
Different insurance coverages are available for restaurant owners. The type you go for depends on the scope of the policy, the requirements and the type of coverage you are looking to get.
Here are some of the common types of restaurant insurance coverages to get for your business this year.
1. General Liability Insurance
This is also known as the Commercial General Liability or Restaurant Liability Insurance. The policy protects your restaurant business from harm caused to someone on your property. Th person could either be a visitor or a customer.
When it comes to the harm, they are mainly bodily injury. However, advertising injury and property damage can be covered, depending on the policy provider.
Examples of Restaurant Liability Insurance
Here are some examples of possible scenarios that could prompt the affected party to sue your business for damages:
- Bodily Injury: If a customer or visitor your property gets bodily injury, such as slipping on the floor and gets a concussion; the person can file a lawsuit. The coverage may also cover the restaurant owner from lawsuits from the affected party if the latter gets into a fight on the property and gets hurt. Bodily injury, such as scars from a scalding hot plate can also be covered by the policy.
- Foodborne Illnesses: Illnesses caused by food poisoning on your property also count as one of the coverages in the restaurant liability insurance policy.
2. Business Owner’s Policy
Looking to get as many insurance policies to cover your restaurant business? It may be a great buy to get them all at once, and as a “bundle” rather than buying the policies individually. If that is the case, the Business Owner’s Policy is your best bet.
This insurance policy is used to cover multiple coverages, ranging from general liability, property insurance and business interruption insurance.
Thus, the Business Owner’s Policy or BOP is best if you want to protect your business from different kinds of lawsuits. For example, if you had only the General Liability Insurance, it means that your business might not be protected if someone sues it for serving spoiled food or expired drinks.
But with the BOP, your restaurant business can be protected from all fronts. Most restaurant owners buy the BOP and a few other insurance policies to bolster the protection of their properties and business from lawsuits.
3. Commercial Property Restaurant Insurance Coverage
While the general liability policy covers the business from physical harm done to visitors on the property; the commercial property policy covers the business itself.
With this type of coverage, your restaurant and its equipment are covered. Items like ovens, dining tables and kitchen equipment are covered with this.
4. Employee Dishonesty Insurance Policy
So, you’ve hired a couple of employees, including chefs and waiters. While you expect them to be of good behavior, it wouldn’t be a bad idea to protect your business against financial losses caused by your employees.
From stealing of kitchen equipment to pilfering the money paid by customers; your employees might just run you out of business.
The Employee Dishonest Insurance Coverage protects your restaurant business from financial losses caused by your employees. The policy typically helps you recover the exact amount of money or the equipment stolen by your employees, if that happens.
5. Workers’ Compensation Coverage
This is one of the most important insurance policies for business owners. It covers the injuries encountered by your employees while working for your business, especially on its property. The Workers’ Compensation Coverage also covers the medical expenses for employees, in the case that they fall ill while in active service for your business.
6. Business Interruption Insurance Coverage for Restaurants
The challenges that comes with running a restaurant are not limited to financial losses and poor customer experience. It also includes the possibility of being out of business for a while.
This is usually unforeseen, but with the right coverage, your business’ finances wouldn’t overly affected. The Business Interruption Insurance covers the financial aspects of your business in the event that it is not operational for a while. The likely scenario could be when the business is undergoing repairs.
The financial benefits paid out by the Business Interruption Insurance covers the:
- Employee salary
- The cost of relocating the restaurant to a temporary location.
7. Liquor Liability Insurance
This type of insurance coverage is relevant for restaurants that serve liquor. In addition to helping you in maintaining the alcohol license; the coverage also covers alcohol-induced accidents.
This ranges from property damage and bodily injury caused to someone else by an intoxicated customer.
Restaurant Insurance Coverage-Final Thoughts
Getting restaurant insurance coverage for your business protects your property, its content and the customers from different damages. Discuss with your insurance policy provider to get an idea of the best type of coverage to get for your restaurant business.