Restaurant Insurance: Safeguarding Your Food Service Business

Every business will need certain types of insurance to keep both themselves and their customers protected from mistakes, damages, legal costs and more. Employers’ liability insurance is required by all businesses by law, as it protects your business against claims from employees for accidents or sickness that have occurred by working for a company.

 

Restaurants will need some types of insurance that all other businesses need, but will also have insurance that will be unique for that industry. Many different types of insurance can be provided by insurance companies, so it’s important to understand which ones are the best for you if you own a restaurant, from South Asian cuisine to Italian and everything in between.

 

We will aim to help you understand what insurance you should invest in as a restaurant throughout this article and give you some tips regarding each type of insurance.

Public Liability Insurance

This is a type of business insurance that protects you against claims made by someone who was accidently injured or had their property damaged at your establishment. Public liability insurance can cover legal, compensation and repair/replacement costs. Depending on the insurance company offers, restaurants can receive up to £5 million cover for compensation payments.

 

Public liability insurance covers customers or visitors that have been inside your restaurant and does not cover employees, temporary staff, student workers or people on work placements. However, employers’ liability insurance will cover this, which is required by law. You can also get relevant life insurance if you want employees for serious incidents.

Property Insurance

Damage to your property can be difficult to repair due to the amount of funding that is needed. Property insurance can keep your restaurant’s building covered from any damage caused by vandalism, fire or adverse weather conditions. If your restaurant has to close due to excessive damage, it will also cover loss of income during this time.

 

The contents in the building are not covered by property insurance, as this can only be covered by contents insurance. Both property and contents insurance should be held by restaurants to ensure that everything is covered and can be replaced.

Contents Insurance

Restaurants benefit greatly from content insurance, as it will help protect what’s inside your establishment like fixtures, fittings, seats, tables, food stock and more. These things need protection from a variety of mishaps, such as theft or damage caused by things out of your control. The replacement or repair of these items can cost a lot of money, so having contents insurance places can help with financing this.

 

Many of the items found in a restaurant are integral to the smooth operation of the business, so having some quick cover in place that prevents the halt of operations will be very important for keeping the business afloat. Different amounts can be claimed through this insurance, depending on the level of content stolen and the insurance company chosen. The amount can rise to £100,000 in some cases.

Business Interruption Insurance

Speaking of halting operations, restaurants can get business interruption insurance that can protect them from a loss of income or gross profits that have been caused by serious unforeseen circumstances. If your property is severely damaged by a flood, fire, or any other serious matter that affects how your business can run, this insurance will keep you covered.

 

Depending on how long you think your restaurant will be out of commission, you can choose how long your policy will pay out for. This is essential as the maintenance costs to get the restaurant running again can be giant.

Food Contamination Insurance

Protecting your restaurant from foodborne illness outbreaks is vital. Having food contamination insurance will help you with profit losses that will come as a result of customers getting ill from bad food consumption. This can include the clean up costs for cleaning out the contaminated food, which can be large depending on how serious the contamination is.

 

This type of insurance can also help with product extortion, adverse publicity, government recall and packaging defects. With product extortion, you will be covered in the case of any threat or allegation of maliciously tampering with an insured product, together with a ransom demand.

Commercial Auto Insurance

Industries that rely heavily on using vehicles will need commercial auto insurance to keep them covered if their car, van or truck is damaged on the road or there has been a traffic accident. Paying repair fees for vehicles can be steep, so having insurance in place that can cover these costs can be very beneficial. Commercial vehicles are exposed to more risk than personal ones, so they require a separate policy.

 

Food services, such as restaurants that have a delivery service, will use vehicles daily to help with their day-to-day operations. Some expenses are not covered by commercial auto insurance, such as unrelated medical costs, items within the car, incidents involving personal vehicles, and rental car repairs.

Loss of Licence Insurance

Having an alcohol licence has become a necessity for most types of restaurants in the industry, as drinking culture shows no signs of slowing down. The suspension or revoking of an alcohol licence can be catastrophic for restaurants, as it can deter customers from returning to the establishment. Loss of licence insurance can keep you covered by providing your restaurant with financial support for legal fees, profit losses and ongoing expenses.

 

Your local authority has the authority to cancel licences for reasons outside of your control, such as public disturbance, criminality or disruption. As a restaurant, you are liable for the customers who are in your restaurant so you need to make sure that they drink responsibly if you want to keep your licence.

Liquor Liability Insurance

Restaurants that serve alcohol should invest in liquor liability insurance. This will keep your food service business covered in the case of injury or property damage claims against an intoxicated customer who has been served at your restaurant. This can lead to your restaurant being blamed for overselling alcohol and being held responsible for other people’s actions.

 

There are a variety of reasons why liquor liability insurance can help cover claims such as assault, drunk driving or property damage. The legal fees that will be needed to challenge these claims will be covered by investing in this insurance, as these can pile up if the offence caused by the intoxicated individual is serious.