Why is Restaurant Insurance Required?

• Scalding
• Choking
• Puncture wounds
• Broken teeth
• Food poisoning

All businesses need general liability insurance, especially in this season of sue-happy patrons. You can lose literally millions of dollars when a patrol attempts to sue you for liability.

General liability insurance covers both property damage claims as well as bodily injury claims that result from accidents. When someone slips and falls on your property, general liability has you covered. 

General liability also covers product liability. Thus any food-borne illnesses that your restaurant may cause would fall under this type of coverage. 

In your general liability policy, make sure that you include an endorsement called Product/Completed Operations Hazard Redefined. This endorsement will cover any claims that your food caused illness whether your customers consumed it on or off your property. 

The very nature of restaurants makes the restaurant property more prone to fire. General liability will cover you from damages caused by accidental fires, whether you own or lease your building. 

Make sure your liability policy includes a section on Damage to Premises Rented To You if you do not own your restaurant property. 

Liability will also cover the damage done to a customer's vehicle if there's an accident during valet parking. You can add Garage Keepers Liability coverage to cover this damage. 

You can also add employee benefits liability insurance to your general liability policy. This protects you from any clerical errors you or your staff may make when managing employee benefits.  

Every business has experienced some share of disgruntled employees. When frustrations turn into something more serious, employees can and will sue their employer. They may feel like you've discriminated against them, harassed them, or just treated them unfairly. 

General liability insurance does not cover these grievances. Employee practices liability insurance does cover these torts, so make sure you have it. 

• Loss of income: If your business has to shut down because of events out of your control, you can recoup your losses through commercial property insurance. 
• Backed-up sewer: If your sewer system malfunctions and backs up into your restaurant, commercial property insurance covers the damages. 
• Utility malfunction: If the power goes out in your restaurant, you could lose thousands of dollars in inventory. A utility interruption could shut you down for a period of time as well. Commercial property insurance will cover the damages caused by a utility interruption. 
• Equipment malfunction: If your freezer breaks down and quits or your food warmer stops warming the food, you will need insurance to cover any losses. 
• Electronic data: If your restaurant uses electronic documents for purchasing and invoices along with other elements, then you'll want to make sure you have electronic data coverage through your commercial property insurance. 
• Employee dishonesty: Make sure your commercial property insurance also covers you if an employee steals from you. You put a lot of trust in your employees, so make sure you have yourself covered from any dishonest workers that may make their way into your business. 
• Busy season: You can add peak season coverage to your property insurance if you have a particular time of year where you do the majority of your business. So if you're running a restaurant in an area where tourists visit just at certain times of the year, you have more coverage during those times. 

If you use vehicles for your business, you need commercial auto insurance.

Think about your restaurant model. Will you be picking up supplies or delivering products? You need coverage on your business-owned vehicles as well as the non-owned and hired vehicles that you or your employees will be driving. 

The Canadian Institute for Health Information reported in a 2019 report that over 600,000 ED visits in Canada were due to unintentional falls. On average, that means over 1,600 people visit the ED due to unintentional falls. 

No matter how clean and well-marked you keep areas in your restaurant, someone will slip and fall. 

You can only control so much in your world. You cannot control floods and fires and natural disasters. So it should come as no surprise that property damage is one of the top five claims made.

Commercial property insurance will cover property damage that would normally cost you thousands of dollars out of pocket. 

When your main product is food, you have a high likelihood of dealing with a food poisoning claim. You may not even be at fault. Your food supplier could sell you produce linked to an E.coli outbreak or you had a breach in your plan to have a nut-free, dairy-free, and gluten-free facility. 

If even a single customer can trace their illness back to your food, they will most likely sue you. Product liability insurance will cover the medical and legal costs if this happens. 

When your equipment breaks down, you lose power, or a pandemic forces you to close your doors for a period of time, you can file a business interruption claim if you have the right insurance. 

You will need Equipment Breakdown Coverage and Business Interruption Insurance to cover your overhead costs and lost income while your business is closed and you recover. 

Any restaurant that serves alcohol must have liquor liability insurance. If your intoxicated customer leaves your restaurant and causes an accident that harms a person or property, your restaurant is on the line for liability. Liquor liability insurance will protect your business as well as your employees that individuals may sue for overserving.