Restaurant owners face specific risks that other types industries don’t have to worry about. And while dwelling on the worst-case scenario is rarely helpful, it is important to evaluate what some of these risks are.
Because the truth is many of them will be out of your control. You can’t control whether a guest spills a steaming hot cup of coffee on their lap and suffers third-degree burns. But you will have to deal with any legal and financial consequences.
It’s important to understand where your business is vulnerable, so you can buy the right insurance policies to protect your restaurant and yourself.
Here are five insurance policies you should consider for your restaurant:
Commercial General Liability Insurance
The National Floor Safety Institute (NFSI) estimates that over three million food service employees are injured yearly due to falls at work. But it’s not just employees who are at risk — over one million guests are injured due to restaurant slips and falls.
So it’s really a matter of when, not if, someone falls and injures themselves at your restaurant. This is why restaurant owners need commercial general liability insurance.
General liability insurance also includes coverage to protect the insured if a patron falls ill as a result of ingesting food from your establishment.
Commercial Property Insurance
A fire, break-in, and water damage are just a few of the potential hazards that await you when you own commercial property. And if your restaurant is closed for business due to damages, you have no way to bring in revenue. Without insurance, that could be enough to put you out of business.
With commercial property insurance, your property and business assets are protected. Coverage will vary depending on the policy you purchase, and you should work with an experienced broker to ensure your policy covers the biggest risks your building faces based on your location.
Commercial Auto Insurance
Did you know that there were over 40,000 motor vehicle deaths in 2016 alone? Most of us don’t think about this, but driving a car is actually one of the riskiest things we do every day.
If your restaurant offers any sort of delivery or catering service, your business is at risk and you will need commercial auto insurance. This is not just for company vehicles; it may apply if your employees are using their own cars to make deliveries for you.
If you or one of your employees is involved in a car accident and found to be at fault, commercial auto insurance may cover any vehicle repairs if you buy physical damage coverage.
Workers’ Compensation Insurance
As a restaurant owner, you are responsible for prioritizing the health and safety of your employees. And even if your employees follow every workplace safety procedure they could still be injured on the job.
Workers’ compensation insurance is beneficial for both you and your employees. If one of your employees has an accident at work and has to go to the hospital, their medical expenses will be covered. It will also cover a portion of wages – based on a scale as a result of the accident.
Commercial Umbrella Insurance
It provides additional liability limits typically over your general liability, commercial auto, and employer's liability on the worker’s compensation policy.
For instance, if you are involved in an ongoing lawsuit, the claims could exceed your general liability coverage at some point. Commercial umbrella insurance works as a safety net to cover the remaining expenses up to the limit.
There are more than one million restaurants located in the United States. And over 14 million people are employed in the restaurant industry. As a restaurant owner, you have a lot of opportunities available to you. But you also need to be smart about managing your risks.
Of course, every restaurant is different and your insurance needs will vary depending on the type of restaurant you run. Work with a qualified insurance broker to learn about the types of insurance your restaurant will need.