How Restaurant Insurance Can Protect Your Business From Legal Liability

Whether an employee makes a clerical error in managing an employee benefit or a customer claims they got food poisoning, you need restaurant insurance to help pay for the costs. The right policy can protect you from a frivolous lawsuit that could shut down your business.

Commercial property coverage can help pay for repairs after a fire or natural disaster, and business income insurance can cover lost revenue while you’re closed for repair work.

General Liability

Restaurant owners know that they face various risks, including property damage, liability claims, and business interruption. These costs could threaten the financial stability of a business. General Liability (GL) insurance helps pay for damages and settlements if an incident occurs. This includes incidents such as a customer slipping and falling or if they have an allergic reaction to food ingredients. It also covers reputational harm and copyright infringement claims.

Preventing these incidents is difficult, but restaurant owners must be prepared for the unexpected. Having the right coverage can help reduce stress, financial burdens, and other concerns for the owner. Other common policies of Restaurant Insurance Denver include hired and non-owned auto liability, which covers vehicles not owned by the business; commercial crime insurance to protect against employee theft, forgeries, and data theft; and employment practices liability.

Employer’s Liability

Restaurant owners should review their insurance coverage frequently, comparing prices and coverage limits from various providers. Some insurance providers offer a business owner’s policy that bundles liability and property coverage, while others allow restaurants to buy individual policies for customized protection. For example, if an employee mishandles a knife during the lunch rush and injures their hand, you could be liable for paying their medical bills and lost wages. But with workers’ compensation insurance, your business is protected.

Other types of restaurant insurance include food contamination coverage, which protects you against claims that consuming your restaurant’s food caused a guest to suffer a physical injury or illness, and liquor liability, which protects you against damages incurred by customers who become injured or cause damage after consuming alcohol purchased from your business.

Business Owner’s Policy (BOP)

A business owner’s policy is a bundle that includes property and liability protection in one commercial insurance policy. BOPs are a good choice for businesses that may need a wider scope of coverage than separate policies can offer. Annual premiums for a business owner’s policy are determined by the size of your company and its anticipated exposures.

BOPs typically include:

• Business property coverage (which protects movable business assets)
• General liability protection (protection from claims like third-party injuries, customer property damage, and advertising injury)
• Business interruption insurance

You must buy these separately because they do not include commercial auto or worker’s compensation coverage. Generally, smaller, office-based businesses (lawyers, real estate agencies, and retail shops) and small restaurants are qualified for a business owner’s policy.

Commercial Auto

If your restaurant uses its vehicles to make deliveries or has employees that drive their cars on business, you need Commercial Auto insurance. This coverage protects your restaurant against liability damages, physical damage, and medical expenses when an employee is involved in a car accident while carrying out business-related tasks.

Commercial property insurance covers repairing or rebuilding your restaurant’s building and kitchen equipment if a covered peril, such as fire or wind, damages it. It also helps cover losses from natural disasters like earthquakes or floods. Depending on your needs, it may be worth adding a policy to cover food spoilage and equipment breakdown. Most restaurants need a mix of policies to cover common risks.

Business Interruption

One of the best ways to save money on your restaurant insurance is to buy a business owner’s policy (BOP). This includes general liability, commercial property, and business interruption coverage in one package.

Business interruption coverage, or business income insurance, reimburses you for lost revenue or profits if your business needs to close down for any reason. It also covers rental or lease payments for your premises, mortgage and tax payments, staff wages, and other recurring expenses you’d normally make, even if the restaurant is closed.

Restaurant owners have enough to worry about without dealing with legal risks that could put their livelihoods at risk. Get restaurant-specific insurance that offers protections tailored to your unique exposures. Your independent agent can advise you on the best options.