Running any type of business carries a certain amount of risk. You rely on your own ability to attract customers and generate profits in order to make your living and to help others make their living as well. If your business is a restaurant, there are additional things to consider, such as food safety and possible liquor licensing. It is also necessary to carry some sort of restaurant insurance in order to protect yourself, your employees, your customers, and your business.
What is Restaurant Insurance?
The type of restaurant insurance a business carries depends a lot on the specifics of their restaurant including
- Where it is located,
- The condition of the building
- Whether the space is owned or rented
- How many customers it aims to serve,
- Whether or not it serves alcohol,
- Whether or not it delivers food
- How many employees work there
Because there are so many different factors in play, a single “restaurant insurance” label there is not a one size fits all definition of restaurant insurance. Instead, insurance agents often put together packages of several different types of business insurance that will cover the needs of a specific restaurant. The most common of these include
Commercial (General) Liability Insurance
General liability insurance is an umbrella policy that most businesses start with. It covers many of the situations where a restaurant might be sued, such as seeing a fly in the salad or possibly an unexpected allergen. It also may cover things such as a fall in the parking lot, or a chipped plate.
Property insurance will cover the actual building where the business is located or it may cover specific equipment that is owned by the restaurant. It will cover damage that happens to the property and may help with income loss in cases where the restaurant must be shut down such as after vandalism or a robbery. Not all property insurance will cover every possible scenario. Some policies might insist that you have separate theft coverage if you are in a neighborhood where the risk is high. It is important to talk to your Milwaukee insurance agent about different scenarios you may encounter and make sure the property insurance portion of your restaurant policy will fit your needs.
Worker’s Compensation Insurance
If people are working for you, you need to be prepared for the possibility that they will injure themselves on the job. Despite efforts to keep a working area safe, restaurants are often fast-paced inviting slips and falls, cuts, bruises, wrenched backs, or burns that can put your employee out of commission but still needing to earn a living. Worker’s compensation insurance will cover these types of situations. If many cases, employers also need to provide other types of insurance to employees such as health or life insurance.
Liquor liability insurance is a good idea for any restaurant that serves alcohol. A limited amount of coverage can sometimes be added to a general liability policy. General policies tend to cover only the social serving of alcohol. If your restaurant doesn’t normally serve alcohol but hosts a charity event where it is served it is more likely the liquor liability can be tagged on to cover these controlled situations. If it is an everyday part of the menu, and especially if you make your own wine or beer on-site, liquor liability should be part of the package. It is meant to cover claims where alcohol should have not been served or sold, such as to minors or possibly the obviously intoxicated. It can also cover a situation where there is a claim that there is a flaw in an alcoholic beverage made at your restaurant.
If you have a company car or other vehicle that you drive for business purposes, an automotive liability component should be included to make sure that the vehicle(s) and the people driving them are taken care of in case of an accident. Even if you use your own car, your personal auto insurance may not cover an accident that happens on “company time.”
Sometimes a limited amount of fire insurance can be included as part of a general liability policy, but it is good to check with your Milwaukee insurance agent to determine exactly how much coverage you need. If there is a kitchen, there is an automatic increased risk of fire. If you want to rebuild after a fire, it is important that your policy will allow you to make a claim toward the replacement value of any items that were damaged, rather than the perceived value.
Loss of Business
Loss of business insurance is something you may want to include in your policy as well. This will depend largely on how much you have to lose. If your business is suspended due to correcting a health code violation or some type of disaster you might be able to make a claim that will cover a portion of profits you would have made. Sometimes, it is enough to pay employees during the time of closure. Your agent can discuss how adding this might affect your premium so that you can make an educated decision on whether or not this is something you want to include.
Most people have heard stories, or have had experiences where there is a hair in their soup or a bug in a salad. These situations are just small examples of food contamination. Food contamination insurance can cover a situation where food spoils because of a power outage, or a freezer is left ajar accidentally. It may also cover contamination that occurs while the food is still with the supplier or en route. It can also cover claims from customers that they experienced food poisoning after eating at your restaurant.
For most restaurant owners, it is best to get some extra guidance when deciding what to include in their insurance, and when reviewing the policy to assure that the coverage they need is actually included. If you are looking to expand or review insurance coverage for a new or existing restaurant in the Milwaukee area contact us to discuss the different options available.