As with any business, restaurant owners need to protect themselves with a comprehensive insurance policy. Restaurant policies are similar to other business policies in that they cover the restaurant’s property in case of basic perils like fire and theft but can also extend to disastrous perils, like floods and earthquakes. The policy may also provide liability for losses that might happen on the premises such as a patron being injured or sickened.
However, there are a few additional types of insurance coverage that restaurant owners need, and to fully mitigate risk, it is important not to try to save a few dollars on a policy and wind up sacrificing coverage and limits that will protect your business. If, for example, the restaurant owns a vehicle or fleet of automobiles for food delivery or other reasons, those autos will need to be insured specifically through the restaurant’s commercial automobile policy. As with all businesses that have employees, worker’s compensation is crucial to have to cover costs if an employee is injured while at work. It is also mandatory that employers provide this coverage for their employees.
Life insurance is also an important type of coverage for any restaurant owner. Life insurance helps pay costs in the case that the owner dies and leaves a restaurant behind with a mortgage and other expenses that must be managed. A death could mean having to close the restaurant or it might create a disruption in service; either way, life insurance can cover any lost profits and help pay bills and debt left behind by the owner.
It is also important to have business interruption insurance as part of the comprehensive policy for the restaurant. Any number of circumstances can close down a restaurant for a few days, from dangerous weather to loss of utilities to civil unrest. Business interruption bridges the gap when profits are lost due to a closure or shutdown from a covered peril.
Of utmost importance, to any restaurant owner who serves alcohol at their establishment, is liquor liability insurance. For those restaurants with a liquor license, serving alcohol to patrons can create its own set of issues. Should a customer drink too much on the premises and injure himself or someone else, liquor liability insurance may protect the owner from an ensuing lawsuit. Food contamination insurance is also a prudent purchase for a restaurant owner. Should a loss of power result in the spoilage of food in refrigeration units or freezers, food contamination coverage pays to replace the food, the loss of which could represent a significant amount of money.
As with any type of insurance coverage, it is important not to skimp. Partnering with a trusted insurance agent is a must. A knowledgeable agent will be able to fully explain the types of insurance coverage available and help determine an owner’s specific needs.
