Insurance Needs for Your Restaurant

Like any business, your restaurant needs the right insurance coverage before you flip over the open sign. Getting the right coverage can protect you in the event something goes wrong so you don't have to close up shop. Keep reading to learn about what insurance your restaurant might need.

Liability 

Liability insurance policies are the type that most business owners are aware of. They can vary greatly in what they cover, so it's important to read over the policies carefully to make sure it doesn’t have unnecessary overlap and that nothing is left out. 

General Coverage

General liability policies protect you in the event a customer or vendor on the property suffers an injury, such as if they slip and fall in the restaurant or parking lot. A general liability policy will also cover your product so that you won't have to pay damages out of pocket if someone suffers food poisoning or similar.

Liquor Liability

Any restaurant that serves alcohol must have a liquor liability policy. This policy covers you in the event a patron is in an accident, injured, or causes injury after drinking in your establishment. Otherwise, your business can be sued and held liable, which means you would pay the costs out of pocket if you didn't have a liquor liability policy.

Employee Protection

Most businesses, with few exceptions, are required to carry worker's compensation insurance. Failure to do so can result in hefty fines. Worker's compensation pays out medical bills and lost wages in the event one of your staff members is injured on the job.

Restaurants are rarely exempt from worker's comp coverage requirements as the work provides ample opportunity for injury due to wet kitchen floors, sharp knives, heavy equipment use, and burn possibilities.

Property 

Whereas liability policies protect the restaurant in the event it is sued, property coverage ensures the restaurant's losses are covered if something goes wrong. Always verify that the policies you choose cover all the property that could be at risk.

Income Loss

There are many reasons for income loss that the right policy can protect you from. These policies typically cover income loss from obvious disasters, such as fire, flood, or equipment theft. The right policy may also provide coverage for other closure reasons, such as if the restaurant must close short term due to owner illness.

Since these policies can be quite broad, verify that the one you choose meets your likely closure scenarios and provides the level of coverage you require. 

Property Damage

A restaurant is prone to all sorts of property damages. Drain backups and grease trap floods, kitchen fires, and vandalism are common damage scenarios. There is also the threat of natural disasters, such as floods and tornadoes.

The property policy you choose should cover both manmade disasters as well as the ones nature is most likely dole out. You may also need to add on umbrella coverage to make sure all possibilities are covered.

Theft Protection

Theft comes in two types: robbery of cash or equipment by an outsider or internal theft from an employee. Theft protection should cover you from both types of theft. Check the coverage limits, especially if you are a high dollar establishment, to make sure it is sufficient to cover the value of equipment or the amount of cash you keep on hand. 

Operations

Day to day operations are something else that may be best protected with an insurance policy. Some of these policies, like breakdown protection, are optional, while others, like auto insurance, may be required.

Breakdown Protection

Most restaurants are dependent on a variety of equipment, from mixers and walk-in coolers to ovens and grills. Just one of these pieces of equipment being out of commission can cut into your bottom line or necessitate a temporary closure.

Breakdown policies cover the repair or replacement of vital equipment. They also cover temporary rentals. So if your fridge breaks, for example, you can rent a cooler and stay operational while your broken fridge is fixed.

Cyber Coverage

An all-too-often overlooked coverage is data breach insurance. Many restaurants now offer online ordering options that allow customers to make payments online, often even providing the ability to store the payment information for ease of ordering in the future.

If a data breach occurs, your restaurant could be on the hook for providing restitution or credit monitoring to those affected. A data breach policy will cover these costs so you don't have to pay out of pocket. 

Auto Insurance

If you have in-house delivery drivers for your restaurant, or if you operate a catering service or food truck, then a commercial auto policy is a must. At a bare minimum, make sure you have an auto liability policy, although a comprehensive policy that covers the vehicle and equipment it contains is also advisable. Generally, full coverage comprehensive policies are available for vehicles that are owned by your restaurant, not personal vehicles. 

Contact Illinois Insurance Center if you would like to learn more about your options for your restaurant in Chicago, IL.