Many restaurant owners may not consider important to have good insurance coverage, but the right insurance agent can work as a partner for your business by recommending coverage that reduces typical restaurant risks. There are health, safety and disaster risks that can easily destroy your business if you do not protect your restaurant using safe practices and covering threats with insurance. In 2018, 2.9 million work injuries were reported in the United States according to the results of a study conducted by the American Insurance Association. The surprising amount of 2.8 million of those injuries occurred in service-related companies, such as restaurants, bars, hotels and neighborhood restaurants.
Common risks in restaurants include slips, trips and falls from both employees and customers. Restaurants generally use dangerous chemicals such as ammonia, bleach and caustic oven cleaners. Any chef can attest that burns, cuts and lacerations are part of the job. New employees sometimes make mistakes when operating cutting machines and other powerful equipment. Handling hot containers with grease creates safety risks, and grease accumulations can lead to spontaneous fires.
Risks that Demand Insurance Coverage in Restaurants
There are many risks in restaurants such as natural disasters, loss of income, fire, theft, accidental glass breakage and civil liability for both employees and customers. Fortunately, many insurance companies offer restaurant package promotions that include many common protections for restaurants. Sometimes, these coverage areas have different names depending on their location, but some of the most common coverages are:
General Liability Insurance
This is one of the most common types of restaurant insurance, and most locations require that you obtain civil liability insurance for certain coverage amounts. This coverage protects you from civil liability, claims and property damage caused by restaurant and staff operations.
If you pick up food with your car or deliver food with a company van or truck, you will need commercial car coverage to protect you from accidents and property damage.
Workers’ compensation claims are common in restaurants and include slips, fall, cut, rubs and sprains from heavy lifting or simply loading heavy food trays constantly during the shift. Employees may also be injured due to physical violence with other employees or customers.
Unemployment and Disability Insurance
This coverage can be combined with workers’ compensation, but this is a different coverage in its own right. This insurance could apply to people who were laid off or have temporary or permanent disabilities due to work activities. Sometimes, local government agencies administer disability insurance, such as a state or provincial unemployment agency.
Loss of Key People
The loss of your chef or other key people due to illness or injury can really damage your business or make it impossible to open. The insurance of a key person can allow you to continue paying receipts or to finance a search for new talent. Although it is not common in restaurants, it could be important if you have a famous chef.
Commercial Property Insurance
This coverage includes the physical location of your restaurant and the damages caused by natural disasters, fires, robberies and other criminal acts. Insurance also generally covers commercial equipment such as ovens, grills, tools and utensils.
Sometimes, broken glass is not included unless you choose to pay extra. Flood insurance is generally also covered by independent policies because some areas are more likely to flood more regularly than others. Property coverage may also include works of art and valuable collectibles if they are valued and declared correctly. Some hazards – such as earthquakes and power outages – may not be directly covered unless you get an additional clause or a separate policy.
Food contamination can happen due to the negligence of staff or third parties. This is why food safety is very important. Insurance coverage can protect you from some of the consequences of food contamination. If the power goes out, you can get coverage for the loss of food in your stores and freezers.
One of the growing risks of any company is when an employee files a claim for unfair termination or a claim for sexual harassment. Liability insurance for work practices may be important for your business if you think you are likely to face these types of claims. For example, bars that employ barely dressed waiters are more likely to face these claims.
Sewer and Drainage Problems
Sewer and drainage problems can close your business. If the drains suddenly stop working and get clogged, you may suffer from standing water in the kitchen or other worse things. Organic grease is a common cause of clogged pipes and, sometimes, a simple call to the plumber will not solve the problem. Some dishwashing chemicals can make layers of debris that narrow the pipes. Water from the rain drain can also cause your drains to become clogged. Preventive maintenance is the best idea, but business interruption insurance can cover the loss of sales while you recover.
Civil Liability for Alcohol
If you sell, brew or make alcohol, you can be responsible for the actions of intoxicated customers. For example, if you serve drinks to an intoxicated customer or a minor, you could be responsible for any accident that it causes. The liability insurance for alcoholic beverages protects you from claims for damages and the costs of defending yourself in court.
Business Interruption Insurance
This coverage protects you from various threats that may close your restaurant. Your POS system – along with other company records – can support your income by making your compensation claim.
Most of these types of coverage are included in standard restaurant insurance packages, so it will not cost you unreasonable monthly premiums. If you need special insurance – such as flood insurance in an area that experiences frequent flooding – most jurisdictions offer guaranteed coverage that is subsidized by local, provincial or national governments.
Protecting Your Own Health
It is important to obtain medical insurance when you have a restaurant, since your medical bills could be the responsibility of the restaurant. Many restaurant workers have lost their business due to medical bills that have not been paid.
The risks of the restaurant business can be adequately covered by a carefully designed insurance plan. It doesn’t matter if you have alternative income streams, such as catering services, home delivery or prepackaged food for sale in the lobby; adequate coverage protects your assets and business operations.
Need Insurance Coverage for Your Restaurant?
Contact our experienced restaurant insurance agents at 713-429-1790. Get in touch with us immediately so we can recommend the right coverage for your business, not only has the Agency Owner worked in restaurants for over many years but some of our current insurance clients include Salata Franchises, Fine and Casual Dining like Urban Eats in the heart of Houston, among others.
We are available 24 hours a day, 7 days a week. To protect your restaurant, give Rafail Insurance Group a call today.