When we talk about restaurant insurance, we are actually referring to insuring all types of hospitality businesses, such as bars, sports bars, taverns, nightclubs, entertainment venues, delis, pizzerias, and more. When looking to buy the right restaurant insurance, it’s first important to understand the basic coverages. Only then can you decide what is applicable to your situation and unique business.
What to Know When Buying Restaurant Insurance
What does basic restaurant insurance include?
Restaurant owners need to consider four basic property and casualty insurance coverages:
- Workers’ Compensation
- Commercial Auto
Property Insurance – Property insurance is to insure the things a business owns, such as the building, equipment, and the food in the freezer. This policy can also include business interruption if a business cannot operate for some reason, such as a fire. Property insurance would step in to help.
Liability insurance – This is to protect a business from claims that others make. If a guest is injured on the property of their property gets damaged, liability insurance would help to cover associated expenses and legal fees. Restaurants also need to consider liquor liability, assault and battery liability, cyber liability, and employer practices liability insurance.
Workers’ compensation insurance – This essential policy covers employees for wage replacement and medical benefits for injuries on the job.
Commercial auto insurance – If a business is on the go delivering and has company-owned vehicles, it needs a commercial auto insurance policy. This is also something that restaurants need to consider if they offer a valet service.
What factors affect the cost of restaurant insurance?
Restaurant insurance premiums vary from one restaurant to the next. A lot of it depends on the individual business’s risks. Underwriters will conduct their own research on the restaurant before they determine a price. The top factors that influence rates include:
- Volume (payroll, sales, square feet)
- Type of property
- Activities offers (delivery, entertainment, off-premises catering)
- Hours of operation
- Loss history
- Proportion of alcohol sales
- Years in business
- Levels of coverage
- Lease requirements
A bar that is open until 2 a.m. that has bands playing two times a week with a high volume of alcohol sales will pay a different premium to a restaurant that has a higher volume of food sales to alcohol sales, which has no entertainment, and that closes at 10 p.m. Generally, the more alcohol volume and the later the business stays open, the higher the premium. Each venue will vary in its risk factor profile as well as ways to save money by adding in security procedures.
Secure multiple policies
In most cases, restaurants need an array of coverages to cover all of their vulnerabilities. This means multiple insurance policies. Working with the right agent can ease the process of finding and securing all this coverage.
ABOUT RMS Insurance Brokerage, LLC
At RMS Insurance Brokerage, LLC, our expertly crafted policies are written specifically for the hospitality industry. We offer custom-tailored solutions to meet any venue’s specific needs. For more information, contact our knowledgeable experts today at (516) 742-8585.