three women drinking beer an an outdoor table at bar/restaurant

8 Crucial Types of Insurance for Restaurants and Brew Pubs

March 24, 2021

If you currently operate a restaurant or brew pub, or you plan to open one up soon, there’s a lot you need to know. Aside from essential business management, marketing, customer service, and cooking skills, you need to be aware of essential types of insurance for restaurants.

The restaurant business can be very rewarding. But serving customers daily, particularly with food and beverages, involves risk. To protect the future of your business, and your personal finances, you need to ensure you have the correct restaurant and business insurance in place.

Wondering what the most important business insurance coverage policies are? Keep reading to ensure you protect your restaurant correctly with these eight different policies.

1. General Liability

One of the most important forms of insurance for your restaurant, or any business for that matter, is general liability insurance. This covers the cost of damage sustained by employees or customers on your property.

If someone were to slip on a wet floor that didn’t have a sign near it, they could sue. This policy may also cover the cost of food-borne illness claims by customers.

Also, if the building you are renting for your restaurant sustains damage from fires or other restaurant-related causes, this policy covers that.

2. Business Property

Restaurant properties cost a lot of money. Building a safe, commercial kitchen and outfitting a dining area for your customers requires an investment of time and money.

But countless businesses across the country face property damage every year. The most frequent culprits are fire, wind and hail, and water or freezing damage.

Whether you own the property or lease it, you need to ensure the property is protected from damage.

3. Business Interruption

As much as you’d like your restaurant to stay open every day, the laws of nature don’t always agree. There are countless reasons your business can be interrupted.

Natural disasters, such as fires, hurricanes, or floods may make it unsafe for people to leave their homes. Or utilities could have been damaged, preventing your kitchen from functioning. In extreme cases, your city may have been evacuated.

In other instances, like riots or pandemics, you may experience a period of time where you cannot operate your business. Because these factors are completely out of your control, a business interruption policy can cover this.

4. Equipment Coverage

The cost to build a commercial kitchen and fill it with all the necessary equipment is steep. Depending on the size of the kitchen, the volume you plan to serve, and your specific restaurant, a commercial kitchen can range from $25,000 to more than $100,000.

It takes a lot of equipment to run a kitchen, from refrigerators and freezers to ovens, stoves, and everything in between. And if your equipment breaks down or gets stolen, you’ll need it fixed or replaced immediately.

Restaurant and business equipment coverage is essential to securing your investment.

5. Cyber Liability

You may not think cyber liability is insurance for a restaurant, but consider this: so much of your business today operates online.

You may have a website where customers can subscribe to your newsletter to receive updates. Or they may be able to place orders online for either carryout or delivery.

And of course, you process hundreds of credit and debit card transactions a day. If your company is breached and any of your customers’ information accessed, you can be held accountable. You should consider a cyber liability policy to protect against this.

6. Liquor Liability

Liquor liability is essential insurance for a brew pub, bar, or restaurant serving alcohol. While you cannot control how your customers behave when they consume alcohol, you can protect your business from liability.

A liquor liability policy will protect you in case a fight erupts or a car accident happens as a result of consuming alcohol. Or if a customer consumes too much alcohol and requires medical attention, you will be protected.

7. Business Owner’s Policy

A business owner’s policy, or BOP, is a convenient business insurance policy that wraps multiple products into one. Most BOPs include both commercial property coverage and general liability insurance.

Because these two policies come bundled together, the package is usually cheaper than purchasing the policies separately. These are intended for small businesses with fewer than 100 employees.

These policies will cover your building and permanently installed equipment. If you are renting the building, it will also cover the cost of improvements you have made to the building. Plus, it can cover the cost of equipment and personal property inside the building.

The general liability portion of the plan will cover bodily injury and property damage. It can also cover advertising injuries sustained.

8. Company Vehicle Coverage

As a restaurant owner, you may need to get around town often.

This could be to pick up specialized inventory that can’t be ordered through a supplier. Or maybe you are creating content for a marketing campaign that requires off-site photography. Maybe you offer delivery or catering services.

Whatever the case, you never want to send your employees out in their own vehicles. If they got in an accident or caused damage while on the job, that can spell trouble for you if their personal insurance limits aren’t high enough.

On top of that, employees shouldn’t need to drive their own vehicles during work hours unless it’s part of their job description.

It’s best to have company vehicles available anytime you or an employee needs to leave your site. Of course, these vehicles need to be protected with a business auto policy.