The right insurance policy may not always be fun to pay for, but it’s essential when it comes to protecting your property – or in this case, your business. Yes, when it comes to safeguarding your restaurant, there are a lot of different factors that you have to consider. This is especially true if your restaurant also includes a bar or serves alcohol. On that note, it’s always good to give your business a regular checkup to make sure that you’re covered to the extent that you should be. Read on for more information about the coverage that you can’t afford not to have if your business meets certain criteria.
Insurance Policy Must-Haves
If there’s one type of insurance that you want to make absolutely sure your restaurant has, it’s general liability. Specifically, general liability protects your business from both known and unknown risks. With general liability insurance, things like lawsuits resulting from slip-and-fall accidents and food poisoning issues are covered. Also covered is property damage and alcohol-related accidents, but only if your establishment doesn’t sell alcohol to its guests. With general liability, all of the aforementioned situations are covered – up to the policy limits. How much general liability coverage you’ll need depends on several factors, such as how big your business is, how much revenue it earns and where it is located, among others.
While most aspects of your business are covered under the general liability policy, your employees are not. That’s why employment practices liability and worker’s compensation policies are so important. You may even consider adding an employee theft policy to your insurance coverage. Here’s a closer look at what the aforementioned policies cover:
- Employment practices liability: You can never be too careful these days, especially when it comes to possible employee discrimination, sexual harassment and any other lawsuits that could arise with any of your former, current or even potential employees.
- Worker’s comp: You never want to think about your employees suffering severe injuries or illnesses – or even death – while they’re on the clock, but this unthinkable can happen. That’s the big value of having a worker’s compensation policy, as such policies cover medical costs, any disability compensation and even recovery costs for employees who are hurt on the job. In the unfortunate event of an on-the-job death, this policy will cover funeral and burial arrangements, as well as benefits to survivors.
- Employee theft: Simply put, an employee theft policy covers your restaurant in the event that a worker stole money or ruined property or equipment.
Other Coverage Considerations
Depending on the type of restaurant you’re operating, there are various other insurance considerations you need to keep in mind. These include:
- Liquor liability: Liquor liability insurance isn’t just essential for nightclubs and bars – but for any restaurant that serves alcohol. Don’t be fooled into thinking that your general liability policy will cover alcohol-related damages or lawsuits – it likely won’t. Liquor liability insurance provides coverage up to the policy amount for any lawsuits related to alcohol-induced fights, property damage and other incidents. And this is coverage that a standard general liability policy likely won’t cover.
- Business interruption: Do you plan for emergency as it pertains to your restaurant? For instance, what if the city your establishment is located in experiences a major storm and your establishment floods? What if the unthinkable happened and it was damaged by fire? If you don’t have business interruption insurance, you could lose revenue for days, weeks, perhaps even months from having to temporarily shut your doors. Having a business interruption policy, for many restaurants, could spell the difference between going out of business and staying well afloat. (Along these lines, you may also want to consider a food spoilage policy.)
- Auto: Another common insurance misconception is that general liability protects your company against auto accidents (that is, if your restaurant delivers or caters). That’s not the case – you’ll need a separate auto policy for that.
After reviewing this list, how does your restaurant check out? Are you covered for everything you’re at risk for – or are there some policies you need to consider a bit more thoroughly? Be sure your restaurant is completely covered… before it’s too late.