The best restaurant insurance is the one that provides the coverage you need at a fair price.
Whether you have owned a restaurant for decades or days, you should read through this to make sure you have asked all the right questions of your insurance provider. (As a side note it may seem strange to ask your insurer or agent questions because when you call for quotes and coverage we pepper you with a million questions but there are things you want to make sure we are aware of.) Every restaurant is a little different, even franchises can have slight differences that change their underwriting completely so that one carrier is better in one case while the next will get better rates and coverage options from a different carrier.
Here are some standard categories of coverage that you want to be aware of. You might even check the box next to each one and use it when you are shopping for insurance so you don’t forget anything.
- General Liability – This is what covers bodily injury or property damage caused by your business to another person. With a restaurant you want to make sure that the classification is correct so that the policy can include foodborne illness.
- Property – Building – If you own your own building you need to make sure you have the appropriate amount of coverage so you can rebuild after a disaster. Even if you are a tenant, your lease may require you to carry the insurance on the building.
- Property – Contents – The appropriate amount of coverage here is whatever it will take to replace everything and get you back in business fast. You don’t want to be forced to find things secondhand as that can take precious time when you need to get back to making money.
- Property – Tenant Finish – Anything that is installed or alterations that the building owner is not covering on their policy. This could include everything from booths to counters to broilers to walk-in freezers.
- Business Owner Policy (BOP) – If you qualify with the carrier, this will be the most comprehensive way to cover things as it includes several of the next items as a package, usually at a lower cost.
- Employment Practices Liability Insurance (EPLI) – This covers failure to hire or wrongful termination lawsuits. Remember, you don’t have to do something wrong to be accused and need to pay for defense.
- Data Breach – Most businesses that experience a data breach, if they do not have coverage, are out of business in six months. This pays expenses to make your harmed customers whole as well as state mandated identity monitoring for twelve months.
- Inland Marine coverage – If you have operations off premises (usually defined as 1000 feet from the address on the policy) this is how to cover those items. Think catering and special events.
- Liquor Liability – This speaks for itself. If you serve it, you need this.
- Hired and Non-Owned Auto – Even if you don’t deliver, if your business does not own a vehicle this is critical coverage. An accident caused by anyone in the course of doing business could cause your business to be named in a suit. If you DO deliver, you may not be able to get this coverage on a standard policy. You will need to look for a standalone HNO policy.
- Commercial Auto – This covers vehicles your business owns. If you have this coverage, the HNO would be added here.
- Workers Compensation – In the state of Colorado this is mandatory if you have anyone working for you for one minute. The premium is based on your class code and payroll.
- Umbrella – This increases the limits of liability protection by adding at least $1 Million over and above the underlying policies. It is not expensive so at least ask for a quote when you shop.
The most expensive policy is the one that doesn’t cover your claim. Don’t skimp on coverage to save a few hundred dollars.