When all your hard work and time goes into your restaurant, you should protect what you have built. The proper insurance is a necessity when having an investment in the food industry. It does not matter what the size of your restaurant is, every restaurant can face losses such as fires, damaged equipment, an employee slipping and falling, or a customer getting food poisoning.

As a restaurant owner, you might not know how much coverage you need or what type of policies would greatly protect you and your establishment. A customized insurance plan can be built to best suit your individual needs.

Who Needs Restaurant Insurance?

All restaurants and food related businesses should have some type of restaurant insurance to keep their establishment protected. A few examples of establishments that need restaurant insurance are:

  • Café
  • Fine Dining
  • Mom and Pop Restaurant
  • Cafeterias
  • Catering
  • Diners
  • Bar and Grills
  • Delis
  • Country Clubs
  • Wineries
  • Food Delivery
  • Fast Food Restaurants
  • Pizza Restaurants
  • Family Restaurants

General Liability Insurance

A General Liability Insurance policy covers a broad range of potential situations from lawsuits and claims resulting from bodily injuries and property damage. Liability insurance would cover events such as a food poisoning outbreak, an accidental slip and fall on a wet floor or an allergic reaction from the food served by your restaurant.

Property Insurance

Property Insurance protects the real estate your business owns and operates in. It will also protect you if you rent the premise you operate in. Beyond the premises that your property operates on, property insurance also covers equipment, dishes, food and other property owned by your restaurant. Many different property coverages exist for restaurants including:

  • Business Income: Helps pay ongoing expenses while your restaurant is unable to function following a disaster or loss. This coverage also helps make up for lost profits.
  • Business Interruption Insurance: Pays extra expenses that do not stop following the loss such as rent and other bills. This provides a safety net for restaurants for when an unexpected event happens like a flood or fire. Over 40% of small businesses never reopen their doors following a disaster due to damaged reputation and loss of income.
  • Food Contamination Shutdown: When handling food, you constantly have the risk of serving food that carries disease or could cause food poisoning. Food Contamination Shutdown would aid your restaurant following an immediate shut down by the Board of Health. The policy would pay for cleanup expenses, food replacement, loss of income, medical testing and vaccinations for infected employees, and advertising to help your business restore its reputation.
  • Mechanical Breakdown: You rely on your equipment to always be fully functioning, so you can carry out work on time. When a piece of equipment such as your air conditioning system/s, cash registers, ovens and stoves, electrical distribution systems and refrigeration systems has a sudden and accidental breakdown, your Mechanical Breakdown Insurance would cover replacement fees or the cost to fix the machinery.
  • Spoilage Coverage: If a storm or loss of power were to occur, food within a refrigerator of freezer would spoil causing you to throw it out. Spoilage Coverage would pay to replace the spoiled food due to the breakdown of your temperature control system.

Liquor Liability Insurance

Any restaurant that carries a liquor license must have Liquor Liability Insurance in the state of New Jersey. Liquor Liability Insurance would cover the cost of a liquor-related incident such as a intoxicated customer driving home and hurting or killing someone. Without Liquor Liability, you are responsible to pay for all costs of the injury including your attorney's fees and medical bills out of pocket. With fees so large, most restaurants would be forced to close their doors.

Other than Liquor Liability for restaurants, there is also Host Liquor Liability for businesses that host events for their employees or an open house event hosted by a Realtor/s™ where alcoholic beverages are served. If someone at the event were to get injured or injure someone else, host liquor liability would protect your business from claims made by the person injured. Host Liquor Liability is most often found within your Commercial General Liability (CGL) policy.

Liquor Liability Insurance is not limited to just restaurant owners that serve alcohol. It includes restaurants that have a BYOB policy that allows customers to consume alcohol on their premises. Even with not serving alcohol, a BYOB policy could still hold the restaurant responsible for any alcohol-related incidents that may occur.

Coverage through liquor liability may include:

  • Lawyers' fees for defending your business against alcohol-related lawsuits. Keep in mind that not only the person injured due to the intoxicated customer can sue your restaurant but also, the customer who was intoxicated.
  • Damages for which you're found liable for in court.
  • Coverage for incidents that occur off your business premises. For example, if a customer were to cause an accident while driving their own or someone else's car, you could be sued for damages even though you were not directly involved in the accident. 
  • Coverage for bartenders who drink while working.
  • Coverage for assault and battery. If there was to be a fight to occur among customers or between one of your security members and a customer on your property, you would be covered. One common example where assault and battery coverage is seen the most is if your staff were to cut off a customer from drinking anymore and the customer grew aggravated and began to get physical. 
  • Coverage for mental damages which some customers may seek following a traumatic event at a restaurant/bar.
  • Coverage for other events that happen on your premises such as sexual harassment/assault and physical altercations.

Workers Compensation Insurance

In the state of New Jersey, if you have one or more employees, you are required to have Workers Compensation Insurance. When owning a restaurant, you have the possibility of having more workplace injuries than most businesses. Workers have the possibility of slipping and falling, getting serious cuts while chopping vegetables, cutting themselves on broken plates, and other safety hazards.

With such a variation in restaurant types, it is important to find a knowledgeable agent who can customize your insurance to your needs. To get your restaurant insurance policy started or revised to fit your establishment, call me, Frank Schiliro at (800) 290-8120 ext. 1102.