Types of Coverages Insurance Brokers Recommend For Restaurant Owners

Posted on: 31 August 2015


If you're in the planning stages of a new restaurant that you want to open, one of the things you can't neglect is having the right kind of insurance for your business. It's obvious that you will obtain fire insurance to protect your physical property, but there are some other lesser-known types of insurance that you may not be aware of that could be beneficial. So to help you open your restaurant with the assurance that you have full protection, here are some of the insurance coverages you must obtain.

Alcohol Liability -- This type of coverage is essential when you own a business that sells alcohol, because you can't control what people will do after they have had drinks at your establishment and leave your premises. This insurance protects you if a customer at your restaurant has drinks, leaves your property and then causes an accident in a vehicle that results in damage, injury or death. The insurance also provides coverage if the person who drank alcohol at your restaurant causes damage without being in a motor vehicle. For example, if a customer drinks at your restaurant, then gets into a fight with a passer-by that results in injury or worse, the insurance would still provide your restaurant with protection. The coverage only kicks in if the person's actions are a direct result of alcoholic consumption and includes money for a defence lawyer, and also pays out if you lose a lawsuit.

Business Income -- You can't make money on your restaurant if the doors are closed, and business income ensures that, if your restaurant is physically damaged and can't open for business, you will be reimbursed for your lost earnings. The coverage also helps to pay wages to your entire staff, including waiters, waitresses and kitchen personnel based on the average of what you were paying before the restaurant was forced to close down. Business income can keep you afloat during the time that it takes for you to rebuild your restaurant, and it can also ensure that your staff is compensated while they wait to return to regular employment.

Food Spoilage -- This is a must-have for restaurant owners, as it protects you in the event that a power outage causes the food you have in your refrigerator or freezer to go bad, which can add up to thousands of dollars. This insurance also covers you when your food spoils due to some type of contamination, bacteria or germ, and it doesn't just pay out to replace the food, but it also pays out if you accidentally serve someone spoiled food, which leads to a health issue. The coverage has some specific language about the steps you must take to prevent food from spoiling, so it pays to read the fine print, but food is the essential aspect of any restaurant, and insurance to protect against spoiled food is invaluable.

For more information about the insurance you'll want for your restaurant, you should work with an insurance broker from a company like Ian Hewitt & Associates