Insurance for Restaurants Covers the Unique Risks of Restaruants
As a restaurant owner, you face unique risks that business owners in other industries don’t have to consider when getting insurance to protect their livelihood. However, owning a restaurant can be a fulfilling and profitable way to make a living as long as you have the necessary types of insurance for restaurants.
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Your business is vulnerable to damage and loss in many ways that are out of your control, such as harsh weather or spilled coffee causing third degree burns on a customer. Without insurance for your restaurant, these kinds of unforeseen circumstances can put you at risk of significant financial loss and the loss of your business.
What Type of Insurance Is Needed for a Restaurant?
The first step in getting insurance for your business is to determine the insurance needed for a restaurant. Insurance requirements for a restaurant business can be a little overwhelming, but it’s crucial to understand them to keep your business safe from harm. Having insurance for your restaurant protects you when circumstances are out of your control and provides a financial safety net. There may be certain types of coverage that are unique to your geographic location, but there are other coverages that are required as insurance for restaurant owners in general.
This type of coverage protects your restaurant from fire, vandalism, and theft, but certain natural disasters may not be covered by a general policy, such as floods or earthquakes. If these risks are prevalent in your area, you will need to purchase an additional policy to cover these specific risks. If you are financing a mortgage for your restaurant, your lender will most likely require property insurance.
Liability insurance for restaurant owners protects your business if someone is injured on the premises or becomes ill after eating there, even if your food isn’t to blame. You never know the extent someone will go to get money from a lawsuit. If you hold a liquor license for your business, your state may require general liability insurance. If you have company vehicles, ask whether they are covered under a general liability policy or if you would have to purchase commercial auto insurance.
There are two types of employee coverage with insurance for restaurants and bars: workers’ compensation and unemployment. The vast majority of states require some kind of workers' compensation insurance for restaurants. Unemployment insurance provides coverage for employees until they find another job and is often a requirement for restaurant owners as well.
Life insurance is not required to run a restaurant in general, but it may be may be required by your mortgage lender, to protect their investment if you are no longer around to keep your business going. This type of coverage also protects your family if they are left with bills and a restaurant to manage.
Other Types of Coverage
In addition to the above coverages, you can purchase policies that cover any special concerns you may have. One type of additional coverage is loss of business, or business interruption insurance for restaurants, which protects you against lost sales. Specific peril insurance can cover flood and earthquake damage, and food contamination insurance can cover a broken walk-in full of spoiled food.
What types of insurance are necessary for your restaurant will vary slightly from state to state, others will cover risks specific to your location, and some may be required by your mortgage lender. All of them will cover you when unfortunate circumstances put you at risk of substantial financial loss and the loss of your business. You want to know that all of your hard work and hard-earned money are protected if the worst-case scenario happens. Ensure you find a trustworthy insurance company that understands your local and state laws, as well as what coverages are required of you as a restaurant owner.