The restaurant business is a $780 billion industry, with more than 1 million locations employing over 14 million workers. And this big business is driven by small business — seven in 10 restaurants are single-unit operations, and nine in 10 restaurants have fewer than 50 employees.

When it comes to running your restaurant, there’s not much margin for error — whether you’re pricing out menu items, passing a health inspection, or making sure you’re covered should you lose inventory after a freezer breakdown. Without the right coverage, a single incident could put your restaurant out of business. To help you avoid that fate, here are four ways to fortify your restaurant insurance coverage.

  1. Determine your biggest risks: How much frozen or refrigerated inventory is on-site? Do you have a valet service? Do you serve alcoholic beverages? Do you have grills, deep-fat fryers, or wood-fired stoves? Start by making a list of worst-case scenarios. Not only will this help you mitigate risk (realizing you need a backup generator for your freezer, for instance), but it’ll help inform your conversation with your independent insurance agent — so that he or she will better understand your coverage needs. 
  1. Get extra coverage, where needed: You most likely have basic coverages like property insurance to protect your location and kitchen equipment, or general liability insurance to safeguard you against business-related lawsuits. However, you might not think about your specialized needs or other potential costs should your operation experience an accident or outage. When catastrophe strikes, you don’t want to find yourself underinsured. Here are some examples:
  • If you cater events, off-premises coverage might be necessary. You may also need commercial auto coverage if you or your employees are driving on the job.
  • Food contamination coverage helps cover costs to clean equipment, replace contaminated goods, and restore your business’s reputation if the board of health orders you to shut down.
  • If your freezer fails, loss of refrigeration coverage can help replace the contents.
  • Liquor liability coverage can help protect your business if it is held liable for any injuries or damages caused by an intoxicated patron. 
  • If one of your employees causes damage or injury while parking a customer’s vehicle, valet parking liability coverage can help cover any related costs.
  • Umbrella coverage extends the limits of your liability coverage and can help save your business from door-closing expenses in the event of widespread foodborne illness or other serious accident.

Many of these coverages can be included as part of a business owner’s policy (BOP) or commercial package offering, both of which bundle property and general liability insurance. Talk with your independent insurance agent to find out more.

  1. Cover everybody: You probably have workers compensation insurance to cover employees’ on-the-job injuries. Also make sure your business is covered in the event that customers, vendors, suppliers, contractors (cleaning staff, etc.), or anyone else is involved in an on-site incident. A diner slipping on a spill might not seem like the end of the world; but if someone sustains a serious injury and you don’t have adequate coverage, you could find yourself footing a sizeable bill. A BOP, commercial package policy, or general liability policy can help provide this type of protection.
  1. Don’t be afraid to spend a little more on premiums: In food and in insurance, you often get what you pay for. A low-cost, one-size-fits-all policy might seem like an easy solution — until there’s a problem. Make sure your insurance provider understands your specific business and needs. A good provider with a comprehensive and tailored coverage solution can save you a lot of trouble in the long run.
There are many critical ingredients to running a successful restaurant: staffing, training, customer service, complex inventory needs, detailed food preparation, a top-notch menu — and insurance. Since many of these needs are more immediate, it’s easy to leave insurance on the back burner — but waiting until you smell something burning is a mistake. Talk to your independent insurance agent today to make sure you have everything you need to keep your kitchen cooking for years to come.

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