What Is Restaurant Insurance And The Average Cost? – Forbes Advisor

Owning a restaurant is a difficult but rewarding way to make a living. When you are building your restaurant business, it is important to have the right insurance to protect your investment.

You can get restaurant insurance by purchasing a Business Owners Policy (BOP), which combines the three main types of coverage at a lower cost than buying them individually:

• Property insurance
• Business interruption insurance
• Liability protection

From there, you can add custom coverage for your restaurant business.

Connected: Best Small Business Insurance

What does restaurant insurance cover?

Liability insurance is perhaps the most important coverage in a restaurant insurance policy. Because your customers consume food and drink, you’re always at risk of suing if someone says your food made them sick.

Liability insurance also covers you if someone is injured at your restaurant or if your business is legally liable for someone else’s property damage. The responsible part of the BOP may also provide you with funds to pay for the settlement agreement or judgment and may cover your attorney’s fees.

BOP also provides commercial property insurance. This covers damage to the restaurant building, if you own it, and other property such as kitchen equipment.

Other types of coverage you may need for restaurant insurance:

• Business interruption insurance. If your business is unable to open due to a problem covered by your policy (such as a fire), business interruption insurance will help offset lost income and other expenses, such as moving to a temporary location.
• Commercial crime insurance. Crime-related issues such as burglary, document forgery, fraud (including computer fraud), robbery, and employee dishonesty are generally not covered by commercial property insurance. Commercial crime insurance covers such issues and can help your restaurant recover from crime-related financial losses.
• Extra cost insurance. Pays for expenses such as temporary housing rent.
• Confirmation of food contamination. If the health board closed your restaurant due to a food poisoning outbreak, this will cover expenses such as loss of income, replacement of contaminated products, medical tests and employee vaccinations, equipment cleaning, and publicity to restore your restaurant’s reputation.
• Covering food spoilage. Covers the cost of food that you lose as a result of an incident beyond your control, such as an extended power outage or refrigerator breakdown.
• Liability insurance for alcohol. Liquor Liability Insurance covers bodily injury or property damage caused by a drunken customer served alcohol at your establishment.
• Mechanical failure. Covers the cost of repairing the breakdown of everything from your boilers and piping to electrical machines.
• Workers’ compensation insurance. If your employee becomes ill or injured while on the job, workers’ compensation insurance helps cover expenses such as medical bills, physical therapy, lost wages, disability and death benefits. Most states require businesses to buy workers’ compensation, even if you only have one employee.

What other types of insurance does a restaurant need?

You may also need the following types of insurance:

• Commercial auto insurance. You will need commercial auto insurance if you have a working vehicle. It includes liability coverage, which pays for property damage and injury that you inadvertently cause to others. You can also get insurance coverage for injuries sustained by you and your passenger, and to repair or replace your work vehicle if it is damaged in a car accident or other problems such as theft or bad weather.
• Cyber ​​liability insurance. If your restaurant is the victim of a cyber attack such as a data breach or cyber extortion, cyber liability insurance can help cover costs such as data recovery, investigation services, lost revenue, and privacy lawsuits.
• Employment liability insurance. Protects your restaurant from employment-related claims such as discrimination, harassment, and wrongful termination. Employment liability insurance should not be confused with employer liability insurance.

How much does restaurant insurance cost?

Expect to pay about $175 per month for a $1 million business owners policy with liability insurance, according to Insureon.

The cost of restaurant insurance varies depending on several factors, including the type of facility you own, where the restaurant is located, the amount of coverage you need, and the value of your business property.

Why is restaurant insurance important?

If you own a restaurant, chances are it is your main or only source of income in your life. Imagine the event that led to the sudden closure of a restaurant or prosecution: can you survive financially? If so, how long?

With proper business insurance, you can financially recover from a natural disaster such as a fire that destroyed your business.

In addition, restaurant insurance provides funding to keep your business afloat if someone sues you.