Protecting your business should be your top priority as a restaurant owner.
But how much does restaurant insurance cost?
Owning and running a restaurant can be an exciting venture. From developing a menu to choosing your tableware, restaurant owners have a lot of decisions to make.
And one of the most important decisions you can make is choosing restaurant insurance.
It might not be glamorous, but restaurant business insurance deserves top priority when setting your budget, as there are countless risks and obstacles that face restaurant owners.
How much does restaurant insurance cost and how can you provide your business with the right coverage?
Types of Restaurant Insurance
There is no single policy that is marketed as “restaurant insurance.” Rather, there are many types of insurance policies that you should consider when covering your restaurant, food truck, or catering company.
Here are some of the most common types of insurance restaurant owners should consider:
Commercial Property Insurance
Could you still operate without a functioning walk-in freezer? Or bake your famous homemade rolls without a floor mixer?
Commercial property insurance covers damage to physical property—such as your brick-and-mortar location and kitchen equipment—from things like fires, water damage, theft, and vandalism.
It’s available as stand-alone coverage or as part of a Package or Business Owner’s Policy.
General Liability Insurance
It isn’t just physical damage and loss that you should be concerned about.
Lawsuits regarding bodily injuries, property damage, and even advertising injuries are very common. What’s more, they can arise even if you’ve done nothing wrong, leaving you with hefty legal bills.
In the event that a third party files a lawsuit against you, General Liability coverage can help cover legal fees.
General liability coverage is also available as part of Package or Business Owner’s Policy.
Business Interruption Insurance
When loss and damage strike, there’s bound to be a ripple effect. For example, if a fire destroys your kitchen, you’re not just losing equipment, you’re losing income for the time you’re closed for repairs.
Business interruption insurance covers things like rent/mortgage, payroll, taxes, loan payments, and other expenses.
Workers’ Compensation Insurance
If your restaurant has more than four employees, you’re required to carry workers comp coverage. That doesn’t mean you don’t need Workers’ Compensation if you have fewer than four workers.
Workers comp provides medical benefits and replacement of lost wages for employees who are injured while on the job. It also shields employers from direct employee lawsuits with few exceptions.
Liquor Liability Insurance
If your restaurant serves alcohol, liquor liability insurance is a must.
In the event that you are found liable for damages resulting from the sale or service of alcohol, liquor liability insurance can help cover your legal fees. General Liability does not!
Bear in mind that, while host liquor liability coverage is often included under your general liability policy, liquor liability coverage is not. You will need a separate policy if you serve, sell, or manufacture alcoholic beverages.
Food Contamination Insurance
Foodborne illness affects tens of millions of people every year, so it’s a good idea to take it seriously as a business owner.
Food contamination insurance can help you replace lost inventory in the event of product recalls, equipment malfunction, or even (in some cases) malicious damage.
Commercial Auto Insurance
If your restaurant offers food delivery or you frequently visit locations and vendors in the course of a work day, you’ll need commercial auto insurance. Accidents are common on Florida roads.
The line dividing personal and commercial auto insurance is clear cut, so you might not be able to rely on your personal policy for coverage.
Umbrella Insurance
Different types of insurance are offered at various coverage limits, but even the maximum limit on the policy might not be enough to cover your needs.
In such cases, umbrella insurance can provide additional liability coverage beyond the limits of your existing policies.
How Much Does Restaurant Insurance Cost?
Remember, what we often think of as “restaurant insurance” is not a single policy but a collection of coverage types designed to cover the risks specific to the food industry.
And because every restaurant, food truck, and catering company is different from its competitors, how much restaurant insurance costs you will depend on a number of different factors.
Location
Services Offered
Number of Employees
Annual Revenue
History of Claims
Coverage Limits and Deductibles
While it’s impossible to provide an accurate restaurant insurance quote without further details about the restaurant in question, suffice it to say the restaurant insurance premiums are based on things like your annual revenues—that’s gross revenue, not net profits—and the amount of equipment, property, and other persons or things being insured.
A café grossing $300,000 per year and a white tablecloth steakhouse grossing $2,000,000 will have radically different rates!
Ways to Lower Restaurant Insurance Costs
Like most restaurant owners, you’re probably always looking for ways to lower your expenses and increase profit.
While we always warn our clients away from buying insurance policies based on price, there are things you can do to maximize your insurance coverage and get the biggest bang for your buck.
1. Bundle Insurance Policies
Not only is it easier to manage insurance policies when they’re with a single carrier or agent, but you may be eligible for discounts when doing so.
Make sure you communicate your coverage needs to your independent insurance agent in full to see if you are able to bundle any of your policies.
2. Choose Higher Deductibles
For most restaurant insurance companies, deductibles and premiums are inversely related. This means that lower deductibles mean higher premiums and higher deductibles mean lower premiums.
Keep this in mind when choosing your policy. If you’re more concerned with keeping monthly premiums low, you may want to opt for a higher deductible. Choosing a slightly higher deductible instead of cutting coverage can save you big in the long run.
3. Implement Safety Measures
Restaurant insurance companies love to see policyholders taking proactive measures to decrease risk. As a result, they often offer incentives in the form of discounts.
4. Regularly Review and Update Coverage
As your restaurant grows, it is very likely that the insurance policies you started out with will no longer be the best option for you.
Discuss your goals, risks, and budget with an independent insurance agent annually to make sure you have the appropriate coverage and aren’t overpaying for unnecessary protection.
5. Work with an Experienced Insurance Agent
Last but not least, working with an experienced independent insurance agent can help you find the best price for the coverage that best fits your needs.
Because they are not tied to a single insurance company, independent agents are able to shop a larger section of the market to find coverage that works best for you.
Additionally, as they learn more about your unique risk-tolerance and goals, they’ll be able to recommend coverage options that keep you better protected over time.
Conclusion
Ultimately, the question “how much does restaurant insurance cost?” isn’t nearly as important as this one: “Who are you trusting with your restaurant insurance?”
Working in the food industry isn’t just your livelihood, it’s your passion. And protecting your business should be just as important as making customers happy.
If you’re looking for restaurant insurance that takes all of your needs into consideration, you’ve come to the right place. For more than 30 years, Harry Levine Insurance has been one of Orlando’s top insurance agencies and we continue to provide quality coverage and excellent customer service for some of the city’s top eateries.
Give us a call today or visit our website for a free quote.
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