Posted on May 17, 2014
Running a restaurant is much more than stocking up on supplies, creating menus and preparing food. It requires a delicate balance between customer service, food artistry, relationship building and business know-how to be successful. So when the restaurant and food industry looks to protect all the hard work and investment that goes into their establishments, restaurant insurance is the one element that is a definite necessity.
Commercial insurance protects the restaurant and food industry from the many potential risks that accompany this line of work. No matter the restaurant's size, every business owner experiences difficulties that can ultimately result in claims or lawsuits. Broken equipment, kitchen employee slip & fall injuries and a host of other potential accidents are just a few of the many unexpected issues that arise during the course of working with the general public and employees. Having the right amount of insurance protection in place can mean the difference in keeping a company in business when faced with a large lawsuit seeking a substantial monetary award of damages.
But what exactly do restaurants and other food related service companies need when it comes to insurance protection plans? While each individual company must customize their coverage to best suit their own needs, there are common types of insurance that all will need in varying amounts or policy limits.
General Liability Insurance
General liability insurance is one of the two most common types of commercial insurance that companies need to provide the kind of protection necessary in today's litigious society. The second most common type is general property insurance. Liability coverage protects businesses from lawsuits and claims resulting from injuries and damage to other people's property. For restaurants, liability insurance will cover such customer claims as food poisoning or accidental slip and fall injury on a wet floor.
Of all the different insurance policies available for restaurants, property insurance is another must have coverage. If a worker forgets and burns something on a stove top thus igniting a fire in the kitchen, property insurance pays to repair the damage. This insurance coverage is available to cover all sorts of potential risk such as fire, theft, explosion, flood and earthquake. It will cover not only the actual building but all of the contents as well meaning that furniture, fixtures and supplies are also protected.
Liquor Liability Insurance
Those dining establishments that carry a liquor license are typically required by state law to obtain liquor liability insurance. This vital coverage will protect business owners and their companies from legal liability for customers that drink a little too much and hurt themselves or someone else - including if they drive while intoxicated.
Food Contamination Insurance
Food and supplies are the lifeblood of every restaurant. When storms or loss of power interrupts important electricity to freezers and walk-ins, the power outage can also cause food to spoil. This important type of insurance protects business owners by paying to replace spoiled food.
Workers Compensation Coverage
Most states require that companies with employees carry workers comp insurance. This insurance will cover workers who are injured on the job by paying for their medical expenses and any lost wages as a result of temporary or permanent disability.
Business Income or Interruption Insurance
When an unexpected event happens - like a flood or fire - many companies must close while repairs are made. Business interruption insurance provides a safety net to restaurants so that should a temporary shutdown be necessary, the bills can still be paid.
No matter the event or accident, restaurant insurance is a must. Business owners should review these coverage types with an insurance broker to gain insight into what policies would be best, and then determine the right policy amounts necessary to provide the best insurance protection to meet business budgets.