Restaurant insurance is your business’ number one tool to help protect against losses and damages. Here is what to look for when you sign your restaurant insurance policy.
What to Look for in Great Restaurant Insurance
The restaurant industry in the U.S. was worth over 780 billion dollars in 2016 alone. That number is continuing to trend upward.
If you own a restaurant you may be in the business to take advantage of the abundant financial opportunity the industry has to offer. You may be in the business because of your passion for food. No matter your motive, in order to ensure your continued success, your restaurant needs to be insured.
Protecting yourself against illness and injury incurred on your property. Protection from breaks in income if your restaurant needs to temporarily shut down. These are two of the things a quality insurance policy can give you.
Our team at Insured ASAP put together this article to help restaurant owners shop for an insurance policy that fits their needs. We will cover some of the key items you should look for in an excellent restaurant insurance policy.
Imagine if there was a fire in your kitchen and you had to shut down for 2 months to repair damages done. Could you afford to be closed during that time and have no income?
For many restaurants, a single week of not being able to turn over tables can be catastrophic.
Business income coverage will help bridge your income if you’re temporarily not able to make money due to external factors.
Know that business income coverage does not only cover you in the event of a fire. Any event out of your control that forces temporary closure could entitle you to make a claim. For example, appliances breaking down, natural disasters and more.
Margins are tight in the restaurant industry. Making sure your income gets covered as part of your restaurant insurance policy can help make sure you don’t get overstretched. See to it that business income provisions are present in the policies you choose to buy.
While business income coverage can help fill income gaps during breaks, it will not replace damaged appliances. Because of the stress kitchens put on their tools and how integral they are to their operation, it’s important to have a policy that covers them.
Property insurance provisions make replacing freezers, refrigerators, stoves, grills and more a simple process in the event of untimely breakdowns or irreparable damage.
Safety standards for the restaurant industry are strict when it comes to how food needs to be kept. A power outage as short as a couple of hours may render large stocks of your food useless.
When this happens, having a policy in place that covers the value of spoiled foods can be helpful. With spoilage insurance, any perishables deemed unfit for sale as a result of an event outside of your control could get covered.
Be sure that your restaurant insurance policy has spoliation provisions if you maintain a large inventory of temperature controlled foods.
If your restaurant serves alcohol then you need liquor liability insurance. Some in the restaurant industry choose to forgo this type of insurance. Some are not able to because of property requirements.
Know that as a restaurant owner, this is not a place to cut costs as lawsuits as a result of inebriation can be severe.
With this insurance provision, if someone gets intoxicated at your establishment, any damage they cause to your property will be covered. Think broken glassware, damage to bathroom fixtures and more.
More seriously, if someone gets drunk at your establishment, gets behind the wheel of a car and fatally injures someone, you will be covered. Common sense dictates that the person committing the crime would be solely responsible.
Still, many times if the offender’s assets are nominal, lawsuits will aim to make claims against the restaurant.
Having liquor liability in your restaurant insurance will protect you against those claims.
Ensure Your Policy Take into Account the Full Potential of Your Liabilities
Many restaurants have been turning to insurance called “business owner policies” for coverage. The issue that many of these policies carry is that they tend to grossly undervalue your liability potential.
Most business owner policies rate coverage based on the value of the contents in your restaurant. So if anything were to become damaged or your assets were to get seized as a result of a lawsuit, you would be covered for that.
What these policies often fail to build into them is restaurant receipts.
For example, if you have $400,000 worth of assets but are doing millions in receipts each year, the full extent of your liabilities are likely not covered.
Making sure your restaurant insurance coverage takes into account the full scale of your potential liability will protect you from needing to deal with costly insurance gaps.
Wrapping Up Restaurant Insurance Policies
Owning a restaurant can represent a tremendous financial opportunity. It can also represent a tremendous liability.
From the breaking down of appliances to being liable for injuries on your property, a single lawsuit can put a restaurant out of business. Making sure that you have quality coverage can help ensure your survival through these difficult times.
Are you looking for high quality, dependable insurance for your restaurant or bar? Look no further than InsuredASAP.com.
Our team of insurance professionals has been proving businesses with policies they can trust for years.
We offer policies that cover a wide range of industry-specific needs. Those needs include but are not limited to the auto industry, home offices, retail, construction, cyber security and of course – restaurants and bars.
We would love the opportunity to protect your business!