Restaurants face a variety of dangers when it comes to operation from property damage to liability risks and employee lawsuits. Protecting your restaurant is crucial, but insurance can also get expensive. It is important to know what is affecting your restaurant insurance rates so that you can find the best policy for the best price.
There are many factors that influence insurance, so the price may vary per restaurant. Factors that change the cost of insurance include the restaurant’s:
Prices differ between types of coverage. Restaurant insurance generally includes general liability, property insurance, workers compensation liquor liability insurance.
General liability insurance covers accidents where a third party suffers bodily injury or property damage on the restaurant property. For example, if a customer slips and falls in your restaurant, general liability insurance can help with their medical expenses as well as the restaurant’s legal fees if the victim decides to sue. Rates for this coverage depend heavily on the size of the restaurant and amount of coverage. On average, restaurants pay about $950 a year for general liability insurance. The most common policy limit is $1 million.
Commercial property insurance provides compensation if the physical assets of the restaurant are damaged or lost due to fire, lightning, smoke, wind, fire, vandalism and more. Rates for this insurance depend on the value of the items insured. It may cover the physical building as well as its contents, so consider the value of each insured item to determine how much coverage is needed. Restaurants pay an average of $742 for commercial property insurance.
Depending on where the restaurant is located, workers compensation may be required. Texas does not require businesses to carry workers compensation, but it’s highly recommended—especially for jobs with physical requirements, such as restaurant employees.
Workers compensation costs are generally calculated based on payroll, so this cost depends on the size of the business and how many people are employed. On average, restaurants pay about $1,500 a year, but this cost could be anywhere between $600 and $10,000 a year depending on the size of the restaurant and other factors.
Liquor liability insurance covers incident where a patron causes bodily injury or property damage after drinking at a restaurant, as any damage they cause can come back to the business. This insurance costs an average of $620 a year.
Shop around and work with an independent insurance agency to find the insurance policy that suits your restaurant.