Is your restaurant protected from workers' injuries, diners' slips, and other risks? Our restaurant insurance guide discusses coverage and best providers.
Kymberlin started contributing to Merchant Maverick as a freelancer in 2022 and joined the team as the full-time small business health insurance expert in 2023. She earned her Bachelor of Arts in Creative Writing from Pacific University in 2020 and continues to reside in Portland, Oregon.
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Kymberlin BushKymberlin started contributing to Merchant Maverick as a freelancer in 2022 and joined the team as the full-time small business health insurance expert in 2023. She earned her Bachelor of Arts in Creative Writing from Pacific University in 2020 and continues to reside in Portland, Oregon.
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Restaurant insurance is a must for restaurants of all types and sizes. From the biggest and best restaurant in town to the smallest seasonal food cart, if you’re selling food and drinks to customers, you need restaurant insurance.
In this article, we’ll explain everything you need to know about insuring your restaurant and discuss the best small business restaurant insurance providers.
Running a restaurant involves inherent risk. So many different things can go wrong: a customer slips and falls because of a spilled beverage, a chef cuts herself with a knife, a cooling unit malfunctions and spoils a week’s worth of food, or a foodborne illness sickens diners.
In each of these scenarios, the right insurance can help you avoid serious financial setbacks. The following section outlines some types of coverage you should consider adding.
Essential Insurance For Restaurants
Your restaurant or food service business is unique and needs a customized package of insurance policies. Here are some common types of restaurant insurance:
General Liability Insurance For Restaurants
General liability insurance covers your business if you are at fault in an accident or mistake and someone sues you. This pays for legal representation, judgment payouts, or medical bills if someone is injured on your premises. Sometimes called “slip and fall” insurance, this is important for most businesses, and especially restaurants.
Restaurant Property Insurance
Commercial property insurance covers your building and its contents in case of fire, vandalism, and theft. Most commercial property insurance policies do not cover damages from certain types of disasters, so you should discuss with your insurance representative and add flood insurance or protection from earthquakes and volcanic eruptions if it makes sense for your business.
Workers' Compensation Insurance For Restaurants
While general liability protects you if customers are injured at your restaurant, it doesn’t cover your own employees. Workers’ compensation insurance provides medical and income assistance to employees who are injured on the job.
Each state has different workers comp policies, with Texas being the only state that doesn’t require any. Check your state’s laws and regulations. In general, you’re required to provide workers’ compensation if you have more than one employee.
Restaurant Liquor Liability Insurance
If you serve or deliver alcohol, you definitely need liquor liability insurance. You can add it to your general liability coverage or purchase a separate policy. You could be held liable if claims arise because an adult customer who has been consuming alcohol causes damages, even if your employees follow the rules for serving alcohol. A liquor liability policy should include coverage for legal costs and attorney fees.
Product Liability Insurance For Restaurants
A restaurant’s product is its food, and that delivers some special risks that make extra product liability insurance important. Even when you take every precaution and follow all the commonsense rules and laws that are meant to ensure food safety, you cannot eliminate all risk. Without product liability insurance in place to protect your business, these incidents put your restaurant at serious financial risk.
Another specialty restaurant insurance policy to consider is temperature change coverage. If your restaurant loses power and you have food spoilage, you could recoup the cost of replacing the lost food.
Commercial Auto Insurance For Restaurants
If your restaurant delivers food, has a mobile food cart, or uses a truck or van to pick up supplies, you’ll need commercial automobile insurance. This type of coverage protects your vehicles and drivers for work-related activities and accidents.
Restaurant Data Breach Coverage
If you plan on taking electronic payments, whether through a restaurant POS system or online, then may need cyber security coverage. It will protect you from lawsuits if thieves or hackers compromise your customers’ sensitive information.
Business Interruption Insurance For Restaurants
If your business has to close because of a disaster or accident, business interruption insurance will cover your lost income or the costs of temporary relocation. This policy could even protect you if a property leader suffers damage or foot traffic is limited to your establishment.
The Best Restaurant Insurance Providers
The best restaurant insurance offers customizable coverage that fits your unique needs and meets the demands of your industry. We think The Hartford, THREE, Nationwide, NEXT, Thimble, and FLIP are among the best choices for restaurant insurance.
Read on to learn why these insurers are our top picks.
The Hartford: Best Restaurant Insurance Specialty Coverage
Screenshot of The Hartford webpage, captured 3/7/2023
Why We Chose The Hartford For Best Restaurant Insurance
Let’s face it: Knowing what insurance to buy can be confusing. We like that The Hartford takes some of the stress from the process by offering a comprehensive business owners policy (BOP) that combines three critical policies: general liability, commercial property, and business income. You can add workers’ compensation coverage easily, as well as restaurant-specific coverage such as liquor liability and even drinkable water coverage. That means you can cover all your bases with one fast, free quote.
The Hartford Restaurant Insurance Pricing
Like almost all insurance companies, The Hartford offers custom quotes to insurance customers. However, the company says that its BOPs start at around $261/month. That includes general liability, commercial property, and business income coverage.
You can request your personal quote online or on the phone. It should take about 10 minutes, and you’ll have a quote the same day.
The Hartford Insurance Features For Restaurants
In addition to its business owners policy, The Hartford offers an exceptional number of additional policies aimed squarely at restaurants.
Start with The Hartford’s BOP, then choose from these additional coverage options:
Commercial auto insurance
Workers’ compensation
Employment practices liability
Drinkable water coverage
Liquor liability
You can also explore insurance packages aimed at bakeries and catering businesses.
THREE is a subsidiary company of Berkshire Hathaway, a towering figure in the finance and insurance worlds, with top-tier stability and ratings from financial watchdogs. And THREE has a unique and straightforward approach to restaurant insurance. A THREE restaurant insurance package includes all the coverage you’ll need for your restaurant, pub, doughnut shop, catering company, or any type of food service business.
THREE Restaurant Insurance Pricing
You can request a personalized quote online or by phone. Online, the first thing you’ll do is choose your business type, with options available for a huge variety of food service establishments, from fine dining with alcoholic beverages to fast and casual food service to beverage service only. You’ll also have to enter your name, business name, and email and phone number.
To complete your quote, you’ll share information about your restaurant, including your employees, your property, and your vehicles. THREE says its coverage is designed to cost 20% less than comparable coverage from competitors.
THREE Insurance Features For Restaurants
THREE’s restaurant insurance delivers comprehensive coverage in one policy. Your coverage will be tailored for your precise needs. For example, if you don’t serve alcohol or use company vehicles, your policy won’t include liquor liability or commercial auto insurance. THREE offers the following types of coverage bundled into one policy:
General liability
Commercial property
Liquor liability
Workers’ compensation
Commercial auto
Garage
Equipment breakdown and spoilage
Employment practices liability
Employee dishonesty
Data breach and cyber liability
Earthquake
Flood
You’ll also find downloadable posters you can print and display in your staff areas. Topics include relevant first aid techniques, information on preventing foodborne illness, and effective cleaning.
Screenshot of Nationwide Insurance webpage, captured 2/1/2023
Why We Chose Nationwide For Best Restaurant Insurance
If you’re running a restaurant with multiple locations, or any large and complicated business, you will appreciate the comprehensive coverage and financial stability Nationwide offers. Available in 40+ states, Nationwide offers special consideration to customers looking for restaurant insurance.
Nationwide Pricing For Restaurant Insurance
Compared to some other insurance providers on this list, Nationwide takes a little longer to provide personalized price quotes. You’ll have to provide some relatively detailed information about your restaurant or food service business, and you should have your pricing information within a half hour or so. You can also phone in for a price quote.
Nationwide Insurance Features For Restaurants
Nationwide insurance coverage for restaurants starts with a solid business owners policy (BOP) that includes business property, general liability, business income, and equipment breakdown coverage. You’ll also find these welcome features:
Custom solutions for middle market food service businesses with 50+ employees
Commercial auto
Workers’ compensation
Employment practices protection against charges of discrimination, harassment, and wrongful termination
Property and sewer coverage to protect your restaurant from damage from backed up drains
Utility services coverage to protect against inventory losses resulting from utility interruptions
Employee dishonesty coverage
Cyber risk insurance
Umbrella coverage for additional protection above policy limits
Loss control services to review your restaurant operations, procedures, and programs
Choosing insurance for your business can be complicated. But it doesn’t have to be — especially if you use NEXT insurance. NEXT delivers instant quotes online, and instant coverage, too. That means you can quit thinking about insurance and focus on running your restaurant instead.
NEXT Restaurant Insurance Pricing
Enter some basic information about your restaurant or food service business online (location, number of employees, and so on) and you’ll receive an instant recommendation from NEXT. You can go with the recommended policies or add more coverage, then enter your contact information and you’ll receive a price quote online right away.
The price you’ll pay for restaurant insurance through NEXT will depend on a number of factors, such as your business size and location as well as any additional coverage you choose. NEXT says that 82% of its customers pay $75 or less per month for basic professional liability coverage. The average cost of NEXT professional liability coverage for restaurants is $54.
Customers who purchase two or more policies from NEXT receive a 10% discount.
NEXT Insurance Features For Restaurants
While NEXT insures all types of small businesses, it offers some features that are particularly appealing to small and mid-sized restaurants. Here’s a sampling:
Why We Chose Thimble For Best Restaurant Insurance
Thimble offers a business owners policy (BOP) tailored to small and mid-sized restaurants. Unlike some other insurance providers, Thimble offers flexible coverage that allows you to adjust your coverage as your insurance needs changes throughout the year. That’s perfect for caterers and other non-restaurant food service providers.
You can purchase Thimble insurance coverage by the job, by the month, or annually. And you can pause, modify, or cancel your coverage as needed.
Thimble Pricing For Restaurant Insurance
Thimble offers policies starting around $17/month. The amount you’ll pay depends on factors such as your building occupancy, location, number of employees, and more. You can get an instant quote online.
Thimble Insurance Features For Restaurants
You’ll find a number of friendly features with Thimble Insurance. Here is a sampling:
Month-to-month payments with no added fees
Business owners policy (BOP) combines general liability and commercial property. You can also purchase these policies separately.
Business contents insurance covers everything inside your restaurant, including cook stations, tables, and chairs
Business interruption insurance
Business equipment protection (typically known as inland marine insurance)
Hired and non-owned auto insurance
Liquor liability
Event liability insurance
Workers’ compensation coverage (including for independent contractors)
FLIP is all about insurance for food business. In fact, the letter in this company’s name stand for Food Liability Insurance Program, and that’s what it has to offer. It doesn’t matter what kind of food you’re serving, or how and where you’re serving it. From home cooks working under their state’s cottage laws to food trucks and trailers, FLIP has the insurance protection you need.
FLIP is licensed in all 50 states.
FLIP Pricing For Restaurant Insurance
FLIP provides custom quotes built around your needs, with general liability coverage starting at $25.92/month for food trucks, food vendors, caterers, and all kinds of food-based businesses. FLIP also allows you to pay for coverage monthly, instead of annually, which is a budget-friendly feature small businesses should appreciate.
Apply for FLIP insurance online to receive an instant quote, and you can be covered within minutes.
FLIP Insurance Features For Restaurants
FLIP offers policies fine-tuned for an impressive variety of food-based businesses. This includes bakers, bartenders, caterers, commercial kitchens, cottage-law cooks, food carts, restaurants, personal chefs, and other types of cooks and sellers. You’ll also find some additional coverage options, like the following:
Liquor liability
Assault and battery coverage
Inland marine (covers your business equipment)
Trailer endorsement
Professional liability
Excess liability
Cyber coverage (data breach)
However, FLIP may not offer the right coverage for larger businesses. If your gross annual sales are higher than $500,000, you may need a different insurer.
Merchant Maverick has been researching and reviewing business insurance since 2020. Our writers have tested over twenty different major insurance companies. In each review, we evaluate pricing, features, customer service, and user reviews.
When comparing different business insurance companies, we consider many data points, including relative pricing, the number of standard insurance policies available, and the ability to create custom policies. Our lists of the best business insurance providers include only those we’ve deemed worthwhile from multiple vantage points and often share qualities such as low cost, a variety of niche business insurance policies, multiple ways to file claims, and excellent customer support.
We spend an average of 10-15 hours researching and updating each one of our lists, ensuring that the business insurance companies included meet our internal standards for quality and reputation.
Why Is Food Business Insurance Important?
Every business needs insurance, and a business involving food may need it more than most. After all, with sharp objects, hot surfaces, potential contamination, and perishable food to consider, even a well-run restaurant can have significant opportunities for mistakes, injuries, accidents, and losses.
Insurance for your food business can give you peace of mind and protect you financially if and when incidents occur. It’s important to consider your potential risks so that you can explore your insurance options and discover the right fit.
At a bare minimum, most restaurants should carry general liability insurance coverage. You can find some affordable options on our list of the best liability insurance providers.
How Much Does Restaurant Insurance Cost?
After deciding to purchase insurance, it’s natural to start worrying about the cost of business insurance. How much does restaurant insurance cost, and can you afford it?
Insurance for your restaurant may not cost as much as you think. According to Investopedia, a comprehensive insurance package for restaurant owners (including a BOP, liquor liability, and workers compensation) costs around $4,000/year.
However, if you’re running a smaller food-based business out of a rented space, you could pay a much lower cost. Investopedia says that type of coverage could be as low as $299/year.
What you’ll pay for business insurance depends on quite a few factors. Let’s start with your location, your business model (e.g., dine-in, delivery, take-out only), how many employees you have, if you serve liquor, and so on. Additional factors include your restaurant’s capacity, whether you rent or own your building, and the safety conditions inside your restaurant.
When you meet with an insurance expert, discuss if it’s cost-effective to bundle insurance policies. Then go shopping for the best policy. Many sites like Coverwallet, Coverhound, and Insureon will comparison shop for you.
Ways To Save On Restaurant Insurance
Because restaurant insurance may be expensive, you might be looking for ways to cut down on the cost. There are a few ways to make purchasing insurance a bit more manageable.
Choose A Higher Deductible: Your deductible is the amount you pay out of pocket before insurance kicks in. The higher the deductible, the lower the premium.
Buy A Package Or Bundle Policies: A business owners policy typically combines several types of coverage into one policy. A BOP typically is less expensive than the individual costs of those policies.
Address Risk Factors: You may pay less for insurance if you update your security system, install outdoor lighting, or reduce other identifiable risk factors. This goes for worker’s compensation, too; those rates may be lowered by implementing employee safety procedures and training.
Ready to get insured — and to get the best price on your policies? Follow our suggestions for how to get insurance and get insurance coverage for your restaurant today!
Restaurant Insurance FAQs
What is restaurant insurance?
Restaurant insurance is a specific package of business insurance policies that are especially beneficial for restaurants. The main policies to look out for are general liability insurance, commercial property insurance, workers’ compensation (if you have more than one employee), and product liability insurance. If you serve alcoholic beverages, add liquor liability insurance to that list. And if you or your employees drive vehicles for work, you’ll need commercial auto coverage.
Why do I need restaurant insurance?
Although almost every small business should carry some insurance, it’s especially important for restaurants and food-based businesses. Running a restaurant involves numerous inherent risks, including injury and illness. Without insurance protections, you are risking your restaurant’s financial security and ongoing ability to operate.
What types of insurance do I need for my restaurant?
Your restaurant insurance needs start with a business owners policy that includes general liability. If you have employees you should add workers compensation coverage, if you serve alcohol you must carry liquor liability insurance, and if you or workers regularly drive on restaurant business you’ll need commercial auto coverage. Product liability insurance is definitely a good idea, too.
What types of insurance do I not need for my restaurant?
Your restaurant does not need commercial property insurance if you are not maintaining a physical space. You may want a business renters policy, though. If you’re not driving for work, you may not need commercial auto coverage. It’s definitely smart to check with an insurance expert to see if a policy or add-on you’re considering isn’t a good fit for your business.
How much does restaurant insurance cost?
The amount of factors that determine insurance premiums for restaurants makes it difficult to provide specific rates. At the very least, expect to pay close to $700 a year for a business owners policy (BOP), and be prepared to see the cost rise to around $3,000 annually after you’ve purchased necessary coverage that isn’t included in your BOP.
How much insurance coverage do I need for my restaurant?
The coverage you need for your restaurant will depend on factors like the capacity of your restaurant, your location, the square footage of your building, your payroll, and sometimes even your projected sales. Be sure to talk with your insurance representative to discuss limits and exceptions to identify gaps in your insurance coverage.
Kymberlin started contributing to Merchant Maverick as a freelancer in 2022 and joined the team as the full-time small business health insurance expert in 2023. She earned her Bachelor of Arts in Creative Writing from Pacific University in 2020 and continues to reside in Portland, Oregon.
View Kymberlin Bush's professional experience on LinkedIn.
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