From creating an idea to opening the doors to your first restaurant, starting a business is a huge venture that requires hard work, resources and meticulous planning. A large part of this planning is making sure your restaurant has the right type of insurance. Every business needs insurance, but restaurants face a unique set of risks that need specialized insurance.
What Does Restaurant Insurance Cover?
A comprehensive restaurant insurance policy covers:
- General Liability: General liability insurance provides coverage for accidents involving bodily injury, property damage and personal or advertising injury. For example, if someone slips and falls in your restaurant, this insurance can cover the customer’s medical expenses as well as legal fees that the restaurant may face regarding the injury.
- Commercial Property: Commercial property insurance covers the physical assets of the business in case of damage or loss due to fire, wind, hail, lightning, smoke, theft, vandalism and more.
- Commercial Auto: Many restaurants may own or lease vehicles for transporting produce and delivering food. In these cases, commercial auto insurance covers the vehicle in case of damage, loss or any damage the driver may cause while operating the insured vehicle.
- Workers Compensation: If you have any employees in your restaurant, you need workers compensation. Workers compensation insurance helps with expenses when employees are injured on the job.
Is Restaurant Insurance Required?
Depending on where you live and what type of insurance, you may be required to have insurance. Many landlords and lenders will require a certain amount of property damage. Legally, commercial auto and workers compensation requirements vary state to state.
In general, you are required to carry workers compensation in a restaurant. It is also incredibly important so that you can avoid expensive lawsuits in case an employee is severely injured at work.
Be sure to check with your state’s insurance requirements to guarantee that you have the right amount of coverage to both operate legally and cover your assets.
How Much is Restaurant Insurance?
The price of restaurant insurance varies widely depending on a lot of different factors, such as your:
- Size of the business
- Type and limits of insurance policy
- Claims history
Many restaurant owners pay around $2,080 a year (about $175 a month) for a business owners policy, which is a small business policy that combines important coverages such as general liability and property insurance. Be sure to ask about insurance specific to your industry, such as liquor liability.
Also Read: What Does General Liability Insurance Not Cover?
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