Every industry comes with its own unique set of issues and concerns when it comes to insurance; the food industry is no exception. And of course, each individual restaurant is unique. There is no one-size-fits-all when it comes to restaurant insurance.
When choosing the best insurance for your business, you need to look at what coverages are required by law and possibly by your lender, and what your risks and needs are.
Here are four questions you need to ask yourself if you want to protect your restaurant:
#1. What type of business are you insuring?
We use the broad term “restaurant insurance,” but that can mean many different types of “restaurants”: bars, nightclubs, pizzerias, caterers, food trucks, full-service restaurants and the list goes on. Each type of business comes with its own unique risks.
#2. What are the primary types of restaurant insurance that most restaurants are required to have?
There are three types of property and casualty insurance that every restaurant owner needs to consider: property, commercial general liability (CGL), and workers’ compensation.
Property insurance will protect the things you own such as the building, equipment, etc. The right property insurance will help you replace or repair your property if it is damaged due to a fire, storm, or theft. It may even include business interruption insurance. If you sustain damage to your restaurant that requires you to suspend operations for a period of time, business interruption insurance covers your loss of income (the profits you would have made had your restaurant been open) while the damage is repaired.
Commercial general liability insurance (CGL) protects you from liability claims against your restaurant for property damage and bodily injury. For example, if someone in your restaurant falls and sustains injuries, they may decide to sue you. CGL insurance will help cover legal costs and any judgments or settlements against you.
Workers’ compensation insurance (WC) is mandatory in most states for most businesses with employees. WC pays for an employee’s lost wages and medical costs if they’re injured on the job. It can also help protect your business against accident-related lawsuits from your employees.
#3. What are other risks I need to consider?
Once you have an idea what the basic types of insurance will and will not cover, you need to consider other risks that could affect your restaurant. Here are just a few examples. If you use a car to deliver food, you need to have commercial auto insurance. If you serve liquor, you should have liquor liability insurance. An experienced commercial insurance agency like American Insuring Group will help you consider all of your risks and determine which coverage is best for you.
#4. What other factors affect the cost of my insurance?
Every insurance policy is unique. An underwriter will ask lots of questions and conduct some of their own research before providing an insurance quote. Here are some of the factors insurance companies consider when determining the cost of your premium:
- Years in business
- Hours of operation
- Size of business including the number of employees, sales volume, and square footage of your property.
- Loss history
- Types of activities like entertainment, mechanical bulls, and off-premise catering.
- Percentage of alcohol sales
It’s probably no surprise that a nightclub with live entertainment that serves light fair (but mostly alcohol) and stays open until 2 am is going to pay more for insurance than a pizza parlor that doesn’t serve alcohol and is only open until 10 pm.
Obtaining the Right Insurance Policy Requires Expertise - Don't Risk It!
Purchasing the best insurance for your restaurant – one that covers all your risks at a reasonable rate – is not a simple process. It takes an experienced insurance agent to ask the right questions and offer the best solutions. That’s just one reason why trying to buy restaurant insurance online is usually not your best options.
It’s also important to note that there isn’t just one insurance company that can offer all types of restaurant insurance at the best price.
Get The American Insuring Group Advantage!
Independent insurance agencies like American Insuring Group represent many different insurance companies (in our case, lots and lots of companies!), so we can find you the best rate for any type of restaurant insurance you need.
So give us a call at (800) 947-1270 or (610) 775-3848 or connect with us online for a free insurance review!