Restaurants are one of the most popular businesses in the U.S., and because so many types of restaurant businesses exist, your insurance needs will vary depending on your business's unique needs.
Restaurant Insurance Coverage Options
If your restaurant stocks a lot of food that could spoil as a result of a refrigerator going on the fritz, or if you have a lot of cash on hand because your customers pay in cash, you want to make sure that your restaurant is protected. Here’s a list of coverage considerations to think about when selecting your restaurant insurance policy package:
- Business Personal Property. Be sure to choose a limit that's sufficient to cover ALL of your inventory (i.e. food), equipment (not just for the kitchen and seating areas - don't forget the back-office stuff like computers, printers and cash registers, as this stuff can add up fast), and any other items your business owns.
- Business Income and Extra Expense. Review that this coverage is included with your policy (it typically is). If you can't do business and lose income because of an event covered elsewhere on the policy, this will reimburse you for that lost income. This can really make a difference if you're relying on a draw from your business to pay your personal expenses (like a mortgage). Without this coverage, other parts of your policy could get your business up and running again, but you could find yourself with weeks or months of lost income and get really behind in your finances.
- Important Business Documentation. The Accounts Receivable and Valuable Papers & Records coverages are often included to pay for the costs of repairing, replacing, or restoring your electronic and printed business records. Just keep in mind that there are usually two limits that apply to these coverages, one for items stored on the business premises (i.e. your fine eating establishment) and the other for off-premises (i.e. that folder of receipts you took home).
- Money and Securities. You'll want this optional coverage if you're primarily a cash business. This would come into play, for example, if your employee gets mugged on the way to making a night-drop deposit.
- Employee Dishonesty. This optional coverage will protect you if an employee (or employees) intentionally acts in a way to cause your business to lose money - for example, a bartender giving away free drinks to all his buddies.
- Food Contamination and Spoilage. These two optional coverages are specifically designed for restaurants and food-service providers. Spoilage provides reimbursement for perishables that go bad due to a covered event while the Food Contamination coverage will provide protection from liability as a result of foodborne illness as well as cover the costs of any product recalls that result from the contamination.