If you own a restaurant, it will be important to have the proper restaurant insurance to keep your restaurant open should the unthinkable happen. If your restaurant, bakery, catering service, or tavern is going to have staying power, you have to build a plan for managing potential risks and pitfalls, and that plan includes insurance.
Restaurants have a unique set of problems that are different from other businesses. Not only do restaurant owners need general liability insurance and workers’ compensation insurance, they must also have property coverage, food contamination coverage, employment practices liability insurance, liquor liability coverage, loss of income, and food spoilage coverage.
Good liability risk management can reduce the chances that your business will be sued, but it can never eliminate the risk entirely. You, or a member of your organization, can make a mistake that injures someone or damages property. Your mistake could harm the reputation of, or interfere with the privacy of, a customer, client, competitor, or member of the public. When such injuries occur, you may be legally liable to pay damages to someone who suffers a loss due to your actions or inaction.
To protect your restaurant, you should consider the following kinds of insurance:
- Property insurance - Covering the value of your building and contents.
- Liquor liability - This helps protect you if a customer has too much to drink and drives and hurts themselves or someone else.
- General liability - It protects you in the event someone slips and falls in your restaurant, or you cause injury to someone.
- Worker’s Compensation- Covers injury to employees.
- Business income - If you have a loss and can’t operate, this insurance provides replacement income for period of time.
- Food spoilage – Covers the cost of food that may be lost if freezers go down. This usually can be added to a boiler and machinery policy.
- Employment practices liability - Protects against wrongful employment practices including wrongful termination, discrimination, and sexual harassment.
- Cyber liability - A newer kind of insurance that offers liability insurance for damages arising from a failure of computer security or a wrongful release of private information.
- Food borne illness coverage - This coverage insures against a customer becoming ill due to your food, or how it was prepared.