One of the most important aspects of running your own business is making sure that you are protected from the unforeseen and unanticipated events that can have serious effects on your bottom line.
Thankfully, there are several insurance products designed to offer coverages that specifically apply to restaurants and food businesses to keep your restaurant protected from property damage, employee injuries, legal battles, and more.
Here are some of the best restaurant insurance programs out there.
General Liability
Having the right insurance can protect your business from costly lawsuits, property damage, and even natural disasters.
General liability insurance covers a broad range of issues including property and equipment damage, medical expenses for customers that have been injured on your premises, or even legal costs if you are sued.
You may also want to consider coverage for specific types of businesses like restaurants. Some restaurants may require additional coverage in order to cover food borne illnesses or liquor liability.
For example, Food Protection Coverage protects against claims involving damages or losses resulting from food contamination;
Liability Coverage protects against claims involving damages or losses caused by a guest who has consumed alcohol while on the premises;
and Premises Liability coverage protects against injury resulting from slip & falls on wet floors, open staircases, etc.
Property Coverage
When you’re a restaurant owner, your property coverage is more than just a way to protect your physical assets from damage. It’s also there to help you recover from any lawsuits filed against you.
With this type of insurance, your business has the peace of mind that comes from knowing that it’s backed by an insurance company and not just an individual policyholder.
You have access to expert advice on risk management, too. The cost of getting this kind of coverage will depend on how much money you make or what industry category you’re in:
high end restaurants are in a higher risk category and therefore pay more for their policies.
You’ll want to talk with your agent about what you need before choosing a plan. For example, if you don’t offer outside catering services, then your property coverage won’t include catering equipment inside the restaurant.
If you operate out of multiple locations in different states, then consider bundling those properties together under one umbrella policy.
That way if one location burns down, all locations would be covered. It can also be a good idea to invest in general liability insurance, which protects you from being sued when someone gets sick after eating at your restaurant.
liability pays for legal defense costs as well as settlements and awards up to certain limits.
Liquor Liability
A liquor liability insurance policy will help protect your restaurant from possible liabilities. This is especially important for restaurants that sell alcohol.
The most common type of liquor liability claim is when a customer becomes intoxicated and gets into an accident after leaving the restaurant.
Other claims can include injuries or property damage caused by someone who was on the premises and became drunk.
The best way to avoid these types of problems is by ensuring you have coverage for your business, which includes both general liability and liquor liability.
Business Interruption
If your restaurant is forced to close for more than 12 hours due to a fire, theft, or natural disaster, there’s a good chance you’re going to lose money and have trouble paying your bills.
That’s why it’s important for restaurants (and any other type of business) to protect themselves with the right insurance.
The best restaurant insurance programs cover loss of revenue as well as medical expenses in case anyone gets injured during the incident.
Most policies will also provide additional funds to help you rebuild if the damage is too extensive for you to handle yourself. These funds are called loss of use coverage.
And while you may think that no one would ever want to vandalize your restaurant, this coverage may come in handy after a terrorist attack.
For example, the recent tragedy at Mariano’s Pizzeria & Grill caused $300,000 worth of damage and closed their doors for six weeks.
Fortunately, they had some protection on hand and were able to reopen within three weeks thanks to their policy’s loss of use coverage.
Employees’ Dishonesty
An important factor in choosing a restaurant insurance program is the coverage for dishonest employees.
It’s well-known that employees often steal from their employers, but not all restaurant insurance programs offer protection against employee dishonesty.
In addition, some of these policies may only cover up to $1,000 in damages caused by employee theft. If your business deals with a lot of cash transactions, this may not be enough coverage for your business.
And depending on the circumstances of an individual case, it may not be covered at all. For example, if you fire an employee who later returns and steals company property worth more than $1,000 before leaving again and this is discovered within three months after firing them (or sooner), then it will not be covered.
when they steal money or assets. There are also instances where even if a former employee takes something worth less than $1,000, it will still not be covered because there is no indication that any damage was done to the property taken.
Additionally, there are situations where compensation under the policy could be limited if one person can’t prove that he/she did not know about the dishonest activity.
So what should you do? You should always contact your agent to ask how long liability lasts for cases of employee dishonesty so you’ll know how much coverage you need for this type of incident.
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