Restaurant Insurance Overview

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Restaurant Insurance Overview

Restaurant def: is a business that prepares and serves food and drinks to customers in exchange for money. Meals are generally served and eaten on the premises, but many restaurants also offer take-out and food delivery services, and some only offer take-out and delivery. Restaurants vary greatly in appearance and offerings, including a wide variety of cuisines and service models ranging from inexpensive fast-food restaurants and cafeterias to mid-priced family restaurants, to high-priced luxury establishments. Source: Wikipedia

Who Needs Restaurant Insurance?

The Canadian restaurant industry is comprised of over 94,290 facilities employing more than 1.2 million Canadians. As going out to a restaurant is the number one preferred activity for spending time with family and friends, it is imperative that you ensure that you have the right insurance coverage for your establishment. If you own and/or operate a restaurant then you need to speak to an experienced broker to assist with your unique insurance needs.

Some organizations that need restaurant insurance include, but are not limited to;

  • Restaurants
  • Fast food diner
  • Coffee shop
  • Food trucks
  • Pubs
  • Reception halls
  • Micro-breweries

What Kind Of Insurance Does A Restaurant Need?

Restaurants need general liability insurance to protect their businesses against third-party claims or litigation. This includes property damage complaints, slip-and-fall injuries, or other illnesses developed because of dining at your restaurant. General liability insurance helps with medical bills, settlement awards, and legal defence costs. They also need commercial property insurance since restaurants operate with refrigerators, stoves, decorations, and other furnishings and appliances. Insurance protection helps with repairing and rebuilding costs should your commercial assets get damaged by a covered peril. Covered perils in your insurance policy can include fires, floods, theft, vandalism, sewage backup, overland water, or windstorms.

Restaurants should also have liquor liability insurance if they serve cocktails, beer, and wine. It protects your restaurant from third-party claims of property damage or bodily injury arising from being served alcoholic beverages. Procedures to limit potential disruptive behaviours include encouraging taxi use and reminding guests to not drink and drive. Since your restaurant serves food and beverages, product liability insurance and product recall insurance are important. It protects your business if customers are harmed by the products you serve, regardless of the preparation process directly involved in your restaurant.

What Does Restaurant Insurance Cover?

As restaurants range from inexpensive and informal dining places with modest food served in simple settings at low prices, to higher-priced, fine dining establishments serving refined food and fine wines in a formal setting, it is important that you have the right insurance coverage that is tailored to the unique needs of your establishment. Restaurant insurance shares many of the same coverage provided by much commercial property and general liability policies, but also includes coverage for the liability arising from the serving of alcohol.

Common Restaurant Insurance Claims

Common restaurant insurance claims include, but are not limited to;

  • Food poisoning
  • Scalding
  • Broken teeth
  • Choking
  • Puncture wounds

Real Canadian common restaurant insurance claims examples to illustrate the need for specialized insurance;

  • A patron falls down a flight of stairs at your establishment and injures themselves due to a faulty handrail.
  • A patron consumes alcohol at your establishment, and on the way home is involved in an at-fault car collision to which alcohol was a contributing factor.

How Much Does It Cost To Insure A Restaurant?

It depends on the type of restaurant you operate, the size of your restaurant, and how much projected revenue the restaurant generates each year. Insurance companies like to look at these factors to determine how costly a claim would be and how risky your business is to insure. The greater these factors, the more likely you’ll have to pay more for restaurant insurance.

Insurance companies also consider the total value of your insured assets and the location of your restaurant. If you have expensive equipment and a high value of insured assets, it’ll cost the insurance company more money when you file a claim, which means you’ll probably have to pay a higher premium. Similarly, an area with higher crime rates could show that you’re a riskier client, which also means higher insurance premiums.

What Is Liability Insurance For A Restaurant?

Liability insurance protects the restaurant against business-related risks, such as third-party injuries, property damage, and loss of profit. It mitigates the financial risks of operating a restaurant and reduces the financial loss resulting from liability claims and litigation, such as legal defence fees, medical bills, and settlement awards.

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For A Restaurant Insurance Overview And/Or More Information On Common Restaurant Insurance Claims Speak To An ALIGNED Insurance Advocate Or Connect With Us Today.

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