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Page written by Chris Godfrey. Last reviewed on September 24, 2024. Next review due October 1, 2025.
There are tens of thousands of restaurants in the US, and they sell every type of food there is. However, despite this diversity, they have one thing in common – they all need restaurant insurance to protect them from financial calamity if the worst should ever happen.
Restaurant insurance is an umbrella term for a range of business insurance policies that can protect food businesses – restaurants, bistros, pizza parlours, steakhouses, even food trucks and hot dog wagons – from financial loss due to accident, negligence, theft, fire, flood, product problems, legal claims and more.
Busy restaurants blend high levels of foot traffic with many trays of food and drink and a kitchen where slippery floors, sharp tools, hot surfaces, or even open flames are ever-present. It’s a heady mix that means accidents, mishaps, errors and omissions can happen at any time – and could deliver catastrophic financial impact to your business.
What does this mean? Imagine if a fire in your restaurant destroyed your fixtures and fittings and all your stock, perhaps even took the building down. What would you do? Could you rebuild from scratch? Could you afford to find other premises to make a fresh start? Additionally, how would you cope if a visitor to your store tripped on a loose floor tile and made a large claim for compensation? Or what if one of your employees became sick because of the work they do for you? Could you afford to pay these claims? Could you afford to stay in business?
What’s more, it’s not only big incidents that could hurt your business. Even commonplace events can have serious consequences:
Your restaurant sells unusual and delicious wraps and salads. Unfortunately, without your knowing, a batch of shellfish carries its own dangerous, exotic extras. The bacteria causes a customer to be violently ill, ending up in hospital. They sue you for neglect, causing harm, and their medical and legal costs. Public liability insurance will take care of the financial impact and the legal worries.
A small piece of plastic packing accidentally ends up in one of your takeaway selections and eventually, in a consumer’s mouth. Fortunately, their claim for compensation can be neatly handled by your product liability insurance.
It’s Saturday night on a bank holiday weekend and your restaurant is fully booked. Then the oven goes down and you cannot operate. Business interruption insurance can cover you for loss of income until you can reopen.
Restaurants are complicated businesses, and they present many different risks. Ideally, you need insurance that protects:
Essential insurance for your food business includes:
Public Liability Insurance protects your restaurant or food business if someone is injured, or their property is damaged because of the services that you or your business provides. This type of cover, also known as PL or Liability Insurance, is designed to protect your business against third party claims for injuries or property damage from a customer or client, passer-by, or a visitor to your operating premises – whether you’re at fault or not.
Product liability insurance (PLI) – also known as ‘product insurance’ – is designed to protect companies, partnerships, sole traders and the self-employed from financial loss in the event that someone is harmed, or property is damaged due to the products that they supply.
Important tip: Product liability insurance for food businesses isn’t only for manufacturers, farmers or chefs. In the event of an accident, your food business could be held liable even if you only distributed the product and had nothing to do with its creation.
Employers’ Liability Insurance (EL) is a legal requirement for most US employers. EL protects you and your employees, (including those who no longer work for you), should they be injured or become unwell as a result of working for your business. EL typically covers the associated legal and compensation costs, and other damages of such events, but it can also cover accidental injury or damage caused by an employee to a third party, such as your customers.
Business interruption insurance covers you for lost income if your restaurant is unable to operate due to an unexpected event. This would include incidents such as:
As well as the essentials you may wish to consider:
Restaurant insurance can protect your food business from the financial impact of many different situations, including common events like this:
Restaurant insurance can cover food business against:
Insurance for restaurants starts around $175 per month. However, the premium you pay will depend on a range of unique factors, such as the type of restaurant you run, the scale of your business, where you are located, and the number of workers you employ.
All business involves risk, but that doesn’t mean you have to suffer the consequences if things go wrong. Don’t let an accident, mishap or error fry your restaurant business. Contact Swoop today to compare top-quality restaurant insurance from a range of providers and to discuss all your business insurance needs.
Written by
Chris is a freelance copywriter and content creator. He has been active in the marketing, advertising, and publishing industries for more than twenty-five years. Writing for Wells Fargo Bank, Visa, Experian, Ebay, Flywire, insurers and pension funds, his words have appeared online and in print to inform, entertain and explain the complex world of US consumer and business finance.
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