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Restaurant insurance in 2023. A complete guide.

Restaurant insurance

The fast-paced nature of running a restaurant comes with daily risks. From the crowds of customers to busy kitchens, customers, and staff members face many hazards.

Owning a restaurant may come with many challenges, but it isn't without its rewards. To protect your business, it's vital to have the right insurance in place.

In this guide to restaurant insurance, we will examine the different types available to you and provide the answers you need to make your decision.

For that reason, we will also examine common high-risk scenarios that restaurants face.

Table of contents

  • Do I need restaurant insurance?
  • What does restaurant insurance cover?
  • What type of restaurant insurance do I need?
  • Additional restaurant insurance coverage
  • When do l I need restaurant insurance?
  • Restaurant insurance FAQ
  • Restaurant insurance cost

Do I need restaurant insurance?

It's always wise to be prepared for any possible setbacks in life, ensuring plans are in place to avoid any. That goes for your business too.

Restaurant insurance helps you to maintain the smooth running of your business, and in some cases, it's a legal requirement.

If you employ any staff (other than immediate family members), you're required by law to have employers' liability insurance.

You should also consider protecting your stock, decor, and specialist restaurant equipment. In the event of theft and damage, restaurant insurance will cover you.

Whether you've experienced a theft overnight or an accident in the kitchen during working hours, any disruption to your business can be a huge financial setback.

What does restaurant insurance cover?

There are various ways to insure your restaurant business. For example, you can get restaurant insurance by buying a business owner policy (BOP).

This policy typically includes three essential coverage types, which is cheaper than buying them separately.

  • Liability protection
  • Property insurance
  • Business interruption insurance

In addition to the business owner's policy, you can add on customized coverage.

To begin, public liability insurance is essential coverage in a restaurant insurance policy.

Liability insurance will protect your business if you're sued by one of your customers for food poisoning, for example. As you're serving food daily, this is always a risk.

You can find out more about public liability insurance here.

We will examine all of the specialized coverage available to you, which you can include in your customized business insurance policy.

What type of restaurant insurance do I need?

You can include several types of coverage in your restaurant insurance policy. We have listed them here.

Public liability insurance

This insurance type protects you against claims due to injuries, illnesses, or property damages. Public liability (or general liability) is a form of liability insurance for guests.

You could claim on your insurance to cover any compensation due to guests who have sued you or for any medical or legal costs.

Public liability insurance covers:

  • Damages you caused to someone else's property.
  • Any injuries or illnesses caused by your business activities and/or products.
  • For any accidental damages or injuries to the public caused by your employees.

Public liability insurance for restaurants can shield you from expensive claims, whether you've been held liable for food poisoning or for causing damage to another party's property.

Business contents insurance

This will protect your business fixtures, fittings, tills, and equipment. Business contents insurance covers issues from work equipment to unfortunate weather incidents.

Business contents insurance covers:

  • Damages caused by theft, flooding, and fire.
  • Any accidental damages to business equipment and fixtures and fittings on your premises.

As part of your business content, there is also the option for covering cash on the premises.

Employers' liability insurance

This coverage will protect you if any staff member (from temporary to permanent staff) gets sick or injured while working for your public house.

Employers' liability insurance will protect you from financial loss whether your staff became unwell unexpectedly while working or if they injured themselves while cooking.

Employers' liability insurance covers:

  • Injuries and illnesses that result from working for your business (for all staff members who aren't family members: permanent staff, temporary staff, and casual workers).

Building insurance

If you own the building of your restaurant premises, you are required to have building insurance. However, if you rent the space, your landlord is responsible for having building insurance.

This insurance is essential to protect your restaurant premises and the structure of the building. This coverage ranges from walls needing repair work to faulty fixtures needing to be replaced.

Building insurance covers:

  • Any damage to your restaurant's fixtures and fittings that need repair or replacement.
  • For damages caused to fixtures (pipes, cables, electricals) that you are responsible for.
  • Expenses for repairing damages to the building or for rebuilding the structure.

Money cover

This coverage is crucial to protect you against financial loss and damage from thefts and vandalism. Money cover insurance will protect you if your restaurant is broken into or vandalized.

Money cover insurance covers:

  • If money is stolen at any time from your cash register.
  • If your business income is stolen while in transit to or from your bank.
  • The cost of any expenses for repair work needed for vandalism and theft damages.

Additional restaurant insurance coverage

Business interruption insurance

This insurance type can help cover loss of income related to the theft or damage of your business essentials and if you have to close your restaurant until matters are resolved.

Business interruption insurance ensures you will be compensated for financial loss if you cannot trade normally.

Business interruption insurance covers:

  • Your business income - if you cannot trade due to damaged and stolen stock, contents, or damaged buildings.

Stock insurance

This insurance coverage will protect your restaurant business if something unfortunate happens to your stock of ingredients.

This could range from spoiled food to expired drinks. Stock insurance ensures you are protected from costly claims and legal matters.

Stock insurance will cover:

  • Damaged, contaminated, spoiled, and unusable goods.
  • The loss or theft of business stock such as drinks, food, and branded items.

Legal expenses insurance

This insurance will cover any legal expenses connected with your restaurant. Whether that's for representation in court or compensation payouts, legal expenses insurance can protect you from facing expensive fees.

Legal expenses insurance covers:

  • Legal fees that are attributed to your business activities and business.
  • All matters related to tax issues, from investigations to compliance disputes.
  • Legal claims and compensation payouts associated with trespass and property damage.

Personal accident insurance

This coverage will protect you and your business if anyone you've covered is accidentally injured off-duty or at work.

Personal accident insurance can cover expenses, whether you have to pay for anyone's medical expenses or lost income.

Personal accident insurance covers:

  • Lost income, medical costs, and hospitalization benefits.
  • Accidental injury or death, inside or outside of work, for anyone covered by the policy.

You may also need these insurance types

Commercial auto insurance

You will require commercial auto insurance if you have a work vehicle.

This insurance includes liability coverage, which covers you for accidental injuries and property damage you cause to others.

Cyber liability insurance

Suppose your restaurant is the victim of a cyber attack, such as a data breach or cyber extortion.

In that case, cyber liability insurance helps cover expenses such as data recovery, investigative services, lost income, and lawsuits due to privacy breaches.

Employment practices liability insurance

This specialized coverage protects your restaurant from employment-related claims, such as harassment, discrimination, and wrongful termination.

Employment practices liability insurance is not the same as employer's liability insurance.

When do I need restaurant insurance?

With many hazards all around, your restaurant is open to all sorts of risks. Here are some common scenarios when you will benefit from the insurance types we examined above.

Public liability insurance

A waiter spills boiling water on a customer, and a claim is made against your restaurant. Public liability insurance could cover damage and injury costs.

Business contents insurance

Your restaurant is flooded due to a flash flood. Business contents insurance can cover the costs of repairing or replacing expensive furniture and kitchen equipment.

Employers' liability insurance

Your head chef trips over in the kitchen and burns their hand on an open fire. Employers' liability insurance can cover medical costs, compensation fees, and legal expenses.

Building insurance

A minor earthquake damages your restaurant. You need to replace your flooring and have professional builders carry out repair work. The repairs could take months of renovation.

Money cover

Vandals damage your seating outside of the restaurant. You will need to have the furniture professionally cleaned and re-painted.

Business interruption insurance

You have to close your restaurant for renovation and repairs. Business interruption insurance can help cover any loss of earnings.

Legal expenses insurance

You need to pay for legal representation in court for providing incorrect financial information on your annual tax report.

Personal accident insurance

Your temporary staff member suffers an injury while playing basketball. They have medical expenses to pay for, and you need to find cover during a busy period.

Restaurant insurance FAQ

How can I estimate the value of my stock?

You must provide an estimated stock value when taking out business contents insurance. This calculation includes all of your stock, including food and alcoholic drinks.

To do this, you should calculate how much it would cost to replace your stock. This calculation is the trade value of your stock, not the retail value.

Remember that you may need to make seasonal adjustments to your sum insured amount. For example, in busy periods like bank holiday weekends, you might have increased food and drink stock levels.

To ensure you're not underinsured during busy periods, you should check if you need to adjust the maximum value of your stock at risk.

Some restaurant insurance providers include seasonal variations, so you can check if your policy covers that.

Restaurant insurance cost

The cost of restaurant insurance varies depending on several factors, including:

  • The size of your restaurant business
  • Where your restaurant is located
  • The value of your business's property
  • Number of employed staff members
  • The annual revenue of your business
  • The average number of customers you have

The cost also includes:

  • Your claims history
  • The amount of coverage you need
  • The policy limits and deductibles

If you are searching for cheap restaurant insurance, it's best to shop around to find what you're looking for. Applying for free quotes will ensure you find the best deal.

By comparing quotes, you will find out the average costs on offer. You can then pick and choose what goes into your customized policy, so you only pay for what you will use.

Restaurant insurance quote

Running a restaurant is hard work and a labor of love. Having the right restaurant insurance gives you peace of mind to ensure your reputable business keeps trading without any issues.

Whether you run a small cafe or own a chain of restaurants, our insurance experts can help you take out a simple policy free of hassle.

With 35 years of experience, Pitsas Insurances can guide you to make the best choices according to your requirements and budget. We will help you choose the best insurance that fits your particular needs.

Ensure you have your information ready when applying for a quote. You will need to provide some details, such as:

  • Your claims history
  • The type of cover you want
  • Your employee number
  • Business name and address
  • How long you've been trading
  • Estimated annual turnover

Business insurance USA

For companies registered in the USA, you can receive quotations from Progressive Commercial.

Business insurance UK

For companies registered in Britain, you can receive quotations from Simply Business.

Business insurance Cyprus

For companies registered in Cyprus, you can receive a quotation from Pitsas Insurances by completing the quotation.

If you have any more questions, contact our insurance experts and work with a licensed agent. We offer a fast turnaround.

For more about how our team of insurance experts can help you, see here.

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