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Choosing to open a restaurant is an exciting endeavor but there are also many challenges that come with it. In order to help ensure the success of a restaurant right from the start, it is crucial that a lot of planning be done beforehand. This planning includes everything from figuring out the perfect menu to making sure that all initial financing is in order. One thing that cannot be overlooked is the need for insurance. Like any startup, opening a restaurant can be costly at first. With limited funds and piling costs before the restaurant even opens, many restaurant owners may find insurance an unnecessary expense. However, not carrying the right business insurance can put your restaurant at risk right from the start and cost you serious financial losses. At Biscayne Risk & Insurance Group, we have put together seven insurance policies for restaurants that you should consider before opening up your own in 2021.

Insurance Policies For Restaurant Risks

Commercial Property Insurance 

One of the most important insurance policies that business owners should have when opening a restaurant is commercial property insurance. Just like when owning a home, property insurance is critical in the event that physical assets are damaged due to an accident. Commercial property insurance is tailored to businesses and covers expenses associated with the loss or damage of property. Commercial property insurance can help cover the cost of things like equipment breakdown, food spoilage, utility interruption or damages from fire. 

Business Income Coverage 

Business Income Insurance Coverage is an extension of commercial property insurance that serves as an extra layer of protection. It helps cover lost income and extra expenses after a business experiences a disruptive incident and must undergo a period of restoration. It provides cash to help a business stay open when property is being repaired or replaced by covering additional expenses like moving the business to a temporary site, buying or leasing equipment for the temporary site, and hiring temporary workers or paying employees overtime. Without the financial assistance of Business Income coverage, businesses could face major losses that could result in permanent closure. 

General Liability

General liability insurance is necessary to cover bodily injury or property damage lawsuits that could occur in the restaurant. One of the most common accidents that general liability covers is slips and falls. Without this insurance policy, a business could suffer significant financial losses if a customer or employee were to be injured on site. Another aspect that the policy covers is product liability which protects restaurants from food-borne illness claims.

Workers Compensation Coverage

Restaurants rely heavily on their employees so you want to make sure that both your employees and your business is protected in the case of unforeseen events. The fast pace of restaurants, hot food and sharp tools can all pose risks to employees. Workers compensation coverage protects your business if an employee is injured at work. Not only is workers compensation highly encouraged, it is a legal requirement. This is necessary not just once the restaurant is operating but during the hiring and training process before the doors even open.

Cyber Liability Coverage 

Cyber liability insurance is a policy that many restaurant owners never consider, but you don’t have to be a tech company to benefit from it. Cyber liability insurance covers financial losses resulting from data breaches or cyber attacks. So how does this relate to a restaurant? If your restaurant has a computer system that stores sensitive employee information, maintains customer data or keeps a record of card transactions, you need cyber liability coverage to protect your business from costs associated with data breaches. 

Employment Practices Liability 

Employment practices liability insurance protects businesses against employees that claim that their legal rights as employees of the company have been violated. Employment practices liability covers various types of lawsuits including discrimination, sexual harrasment, wrongful termination, and failure to promote. Large corporations often have the right employment practices insurance in place to protect themselves from employment lawsuits, but new and small businesses run great risks without the coverage. Employment practices liability coverage can be obtained as an endorsement to a Businessowners Policy or as a stand-alone coverage.

Liquor Liability Insurance 

Liquor liability insurance may not apply to every kind of restaurant but if you plan to serve alcoholic beverages at your establishment, it is a must.  Liquor liability insurance offers coverage to restaurants that sell, serve or even manufacture alcohol. It helps to keep your business protected from legal fees, medical costs and settlements in the event that an intoxicated person whom you sold alcohol to harms another person or damages property. 

Risk Management & Insurance For Businesses 

Opening a restaurant can carry many unexpected risks. The best way to protect your future investment is to ensure that you have the proper insurance coverage for your needs. A trusted insurance broker will know local and state laws regarding how much insurance you will need to carry and can advise you on the best policies for your restaurant. At Biscayne Risk & Insurance Group, we provide innovative insurance, employee benefits and risk solutions in South Florida. Contact us today to learn how we can help protect the health and security of your business.


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