NYC Insurance Blog

Important Things You Should Know About Restaurant Insurance

Owning a restaurant is a big deal for some people. However, some make the mistake of assuming that they do not need restaurant insurance because they are diligent and follow necessary safety precautions. That's not the case because restaurant insurance offers you peace of mind and financial protection. A few restaurant insurance policies can protect you and your business from getting sued or paying out of pocket if a customer is hurt on the premises.

Restaurant insurance is not a specific policy. Instead, it refers to several policies that could help protect a restaurant against damages and injuries. Luckily, you can purchase restaurant insurance from one insurance company or combine various policies from different providers. Depending on the type of policies you have purchased, restaurant insurance can cover the following:

• Workplace injuries
• Building damage arising from accidents or natural disasters
• Cybersecurity breaches
• Accidents that occur in the restaurant
• Lost or damaged equipment
• Vehicle damage while at work

Reasons Why You Need Restaurant Insurance

Regardless of how careful or vigilant you are, accidents are inevitable. Remember that a single accident or incident can cost your restaurant thousands of dollars. Other times, you can waste a lot of time, damage your reputation or incur a hefty financial loss trying to settle damages or injury costs. Restaurant insurance is vital because:

• It protects your restaurant against costly legal costs when an accident occurs on the premises
• It protects your staff/employees
• It protects your customers
• It reduces the chances of paying penalties or fines for non-compliance
• It helps retain employees who understand their worth and contribution
• It helps restaurant owners get contracts or commercial leases with ease

Types of Restaurant Insurance Policies You Should Consider Purchasing

Worker's compensation insurance

The policy protects your restaurant business if an employee gets injured, ill, or dies in the workplace. Worker's comp helps cover medical expenses, legal fees, and lost wages if an employee is injured or sick from a work-related incident. The policy is a must-have in most States to protect employees and business owners. Let us explain the type of insurance to help your resturant remain protected!

Commercial auto insurance

If you or your employees operate business-owned or leased vehicles, this policy provides damage coverage if the vehicles are involved in an accident. Commercial auto insurance covers medical costs and property damage incurred from the accident.

Business owner's policy

Bundling insurance policies is highly recommended because it offers better protection at a reasonable cost. Consider combining general liability and property insurance to protect the building you lease, own and the equipment/property to run your restaurant. Depending on the type of BOP you purchase, you can get additional coverage, for example, business interruption and cybersecurity coverage.

Cyber insurance coverage

Although it can be bought as an add-on to a business owner's policy or general liability, it can be purchased as a standalone. The policy helps protect your restaurant business against data breaches, hacks, and credit card fraud. 

General liability insurance

Also known as commercial liability insurance (CLI), the policy helps cover legal fees and damages to third parties. For example, if a customer contracts food poisoning from your restaurant, general liability insurance pays the customer's medical expenses and legal fees if they decide to sue. The policy also covers property damage coverage to other people's property caused by your restaurant. These damages could range from slander, libel, and copyright infringement to actual property damage.

Liquor liability insurance

If you serve liquor in your restaurant, this is a must-have policy because you can be held liable for property damage or injuries caused by intoxicated patrons. If you cannot purchase it as a standalone, consider consulting your insurance agent to get it as an add-on to your general liability policy.

Business interruption insurance

Sometimes accidents occur, and there is nothing you can do about it. To help replace lost revenue from business interruptions like fires and natural disasters, purchase a business interruption insurance policy. Depending on the extent of the loss, insurer, and coverage level, the policy can also cover relocation and payroll costs.

Equipment breakdown insurance

Do you own equipment whose breakdown can cost you a lot of money in the long run? If that's the case, this is the ideal policy for you. This type of policy covers repair costs and lost wages when a major restaurant equipment breakdown.

Umbrella insurance policy

This type of restaurant insurance policy comes in handy because it adds another protection layer when disaster hits. Remember that each policy has a maximum limit. An umbrella policy kicks in when other policies reach their coverage limits. However, umbrella insurance policies also have limits, and confirming the maximum coverage limit with your insurer is highly recommended.

Conclusion

Since not all restaurants need to purchase the above policies, thorough research is crucial. The best approach is to consult an experienced insurance agent and combine policies to get the best coverage at an affordable cost. Only purchase what you need, consider your deductible, and consider shopping around to compare different offers. Call us today for a FREE Quote