Owning and operating a Restaurant can be quite challenging as owners must juggle a wide range of different tasks and responsibilities, all while making sure that at the end of the day customers are happy and (hopefully) providing positive online feedback. While your reputation is an incredibly valuable asset, it’s only slightly more important than your physical assets. From your building to your employees to even your cache of custom-made menus, whatever (and whomever) your dining establishment requires in order to operate needs to be protected—which brings us to the subject of restaurant Insurance.
What Common Risks Do Restaurants Face?
Your restaurant is regularly exposed to the risk of loss, damage or, in the case of your human resources, injury or illness. These risks will vary depending on the type of asset, but may include:
- Sickness or injury to employees
- Fire
- Theft
- Equipment malfunction or damage
- Accidents involving company vehicles
Every restaurant will face a large number of risks, including many that you may not actually consider. The majority of the risks that affect your Business can be covered by a few, key policies.
Restaurant Insurance: What Are Your Options?
In order to mitigate the risks associated with owning and operating a restaurant, you’ll want to consider a few key restaurant insurance products. Chances are you’re familiar with some of these but may not understand all your options (or some of the key details of these coverage). Some of the common coverages a restaurant owner should understand to protect their assets are:
- Commercial Property Insurance
- Business Owners Policy (BOP)
- General Liability Insurance
- Workers Compensation
- Commercial Auto Insurance
Commercial Property Insurance
A Commercial Property Insurance policy will cover your primary restaurant physical assets. Commercial Property Insurance will help mitigate the cost of replacing lost, stolen, or damaged items from your restaurant. This includes both low and high-value items, as well as the physical restaurant itself. For example, if your restaurant is broken into and high-value equipment is stolen, a Commercial Property Insurance policy will cover the cost to replace those items.
Business Owner’s Policy (BOP)
A combined package, a Business Owner’s Policy (BOP) covers many of the primary concerns restaurant owners have when it comes to their assets. A BOP combines many of the benefits that exist in a General Liability Insurance policy with those of Commercial Property Insurance and Business Interruption Insurance. Consider a BOP as perhaps the most important policy if you are trying to protect a physical property, alongside liability related to events that may happen during the course of business. The inclusion of Business Interruption Insurance within a BOP is particularly important, as the loss of high-value assets could easily result in business screeching to a halt for some time.
For example, if a kitchen fire ravages your ability to prepare meals for a few weeks, a BOP will help ensure that your business is protected by covering the lost property, the damage and repairs, and securing your business income during the time your business is closed.
General Liability Insurance
A General Liability protects your business against a variety of third-party claims of bodily injury or property damage that occur within your business. Although this seems not to protect your primary assets, a General Liability policy can help protect one of the most important things for your business: your financial stability. General Liability claims can be expensive and can eat away at your cash reserves. An example common to many restaurant owners is the case of a customer considering them liable for food poisoning. Even though the event may occur after a visit to the restaurant, this would generally be covered within the scope of a General Liability policy.
Workers Compensation
Employees are key to the operation of many restaurants. Unless you’re running a food truck—in which you manage all aspects of the process—you’re likely employing at least one other person to handle a large number of responsibilities involved in running your restaurant. Consider a Workers Compensation package in order to help protect your business and your employees.
Far too often, businesses only consider Workers Compensation when it’s required by law within their state. Additionally, part of the misconception with Workers Compensation is that it’s only intended to protect your business from having to pay out large amounts to injured employees.
Workers Compensation coverage helps protect your business from having to pay out directly for injured employees, while also ensuring that your employees are taken care of as well. A Workers Compensation policy will help to make sure that your employees receive fair compensation for the time they are unable to work following a workplace injury, and that they receive covered medical care.
Commercial Auto Insurance
Do you take your restaurant’s business on the road? You’ll need a Commercial Auto Insurance policy to cover your vehicles. Regardless of the size of your restaurant, if you’re operating company vehicles to do things such as deliveries and sales, you’ll need a Commercial Auto Insurance policy. A general auto insurance policy just won’t cut it; your insurance company may not cover an accident if they discover it would not have occurred during normal, non-business related usage of a vehicle.
Positively, a Commercial Auto Insurance policy will work just like a regular policy, with the exception that it will allow you to add generic, unnamed drivers to the policy. This way, you can cover any employees who may need to drive the vehicle, and it will generally cover any employees so long as they are legally able to drive.
CoverWallet is the first online insurance manager. CoverWallet’s mission is to provide expert-level concierge service to the 20 million underserved small businesses in the United States. Helping these businesses understand risk, so that they can buy the right insurance and manage it with ease.
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