NYC Insurance Blog

5 Things to Consider When Buying a New York Restaurant Insurance

Whether you’re a local diner in New York serving breakfast and lunch, deli, pizzeria, local bar, or a full-service restaurant, it is crucial to know that your restaurant business faces numerous risk exposures. From a break-in to slip and fall and food spoilage, these risk exposures can affect your restaurant business financially. 

It is impossible to prevent some of these risks from happening. Restaurant owners in New York are advised to prepare beforehand and protect their business with the right insurance program. Since restaurant businesses are different, no insurance policy is the same. Insurance providers tailor an insurance policy to meet the specific needs of your business. When buying restaurant insurance, you should consider the following:

Liability Limits

General liability insurance protects your restaurant from third-party claims and lawsuits. Common liability claims include property damage, personal injury, and advertising injury claims. General liability insurance protects the restaurant owner, the restaurant, and employees when something unfortunate happens. Accidents and losses can occur at any given time. Consider purchasing general liability insurance to avoid losing money or closing your restaurant entirely from lawsuits filed against you. Allow us to help you find the right coverage!

Although restaurateurs in New York believe that a $1 million liability limit is sufficient, that’s not the case. Restaurant owners in New York should have general liability insurance that pays $2 million per occurrence. Additionally, the policy should have an aggregate limit of $4 million to cater for legal fees and settlement. 

Business Income Coverage

Also known as business interruption insurance, business income coverage is crucial because it covers lost income when you unexpectedly close your restaurant. Anything can happen in the blink of an eye, and you can lose revenue if you don’t have business income coverage. For example, if a grease fire damages your kitchen, business interruption insurance reimburses lost revenue while the kitchen is being repaired or replaced. With the insurance policy, you can cover all your operating expenses and pay the employees even if the restaurant is not operational. 

Food spoilage

If you run a restaurant in New York, losing perishable food inventory can be costly. Similarly, if a government entity shuts you down due to food poisoning or related illnesses, it can hurt your reputation and revenue. Perishable foods can spoil due to power outages or equipment failure. Food contamination and spoilage coverage help in such circumstances. Food spoilage and contamination coverage may cover the following costs:

• Replacing ruined food
• Loss of income if your restaurant is shut down
• Employees medical treatment
• Cleaning up 
• Advertising to help restore your restaurant’s reputation after shutting down

Building and Contents Coverage

Also known as commercial property insurance, building and contents coverage protect your New York restaurant assets from burst pipes, fires, storms, explosions, theft, and vandalism. Restaurant owners must understand that this policy does not include floods and earthquakes. However, you can have a customized insurance policy to include them. The insurance policy will protect your restaurant if the building is damaged, destroyed, or lost. Content coverage covers the loss of assets even if you own, rent, or lease the building. A building and contents coverage protects your:

• Building
• Exterior signage
• Furniture and equipment 
• Fence and landscaping
• Inventory 
• Important documents
• Light fixtures, décor, and artwork

Liquor Liability

Liquor liability is necessary if your restaurant sells, serves, or distributes alcohol. Liquor liability insurance can help you cover property damage or bodily harm claims that an intoxicated customer causes after taking alcohol in your restaurant. Remember, although you can get liquor liability insurance as a standalone policy, you can include it as an endorsement in your general liability insurance. 

If you or your restaurant is sued, liquor liability covers:

• Legal fees
• Judgment or settlements agreed upon
• Repair costs
• Medical bills incurred

Liquor liability insurance coverage can protect your restaurant in the event of the following claims:

• Drunk driving applies if an intoxicated customer from your restaurant (served or sold alcohol) causes an accident, injures the other driver, or damages property.
• Assault and battery – a customer served alcohol in your establishment physically hurts another person.
• Property damage - can happen when a customer under the influence of alcohol damages another person’s belongings.

Buying an insurance policy can guarantee success if you own a restaurant in New York. Besides providing protection to your business, buying an insurance policy tells your customers that your restaurant is reliable and responsible. Research well, get a few quotes, and seek insights from fellow restaurant owners in New York City to ensure you have the right insurance protection in place. Give us a Call Today for a FREE Quote.