Restaurant Insurance Basics

When taking out insurance for your small business, it’s important to find the right policy for your specific operation. Often that will start with finding an insurance policy for your industry.

So, if you’re opening up a new restaurant, then that means looking into restaurant insurance – which will indeed be unique in a number of ways as compared with other forms of insurance.

Sure, this isn’t the most exciting or enjoyable aspect of launching a new, exciting restaurant business. And the thought of your restaurant burning down is probably not one you massively want to be entertaining right now. But if you value your new business and you want to make sure it’s around for many years to come then it is absolutely essential that you do.

Sorry.

So here are the things you will need to consider.

Property Insurance

The first thing you will need is property insurance. Of course, this is to cover the premises itself and it will protect you against a number of unwanted outcomes including fire or vandalism. Keep in mind though that this insurance may not cover you against natural disasters such as fires, floods, or earthquakes – so called ‘acts of God’. For that you will need to look for additional coverage (such as natural disaster insurance).

If you have a mortgage on your business, then your property insurance should be based around that. You might look into a decreasing term insurance policy for instance that decreases in value as you pay back the loan. Your lender might even be able to provide this for you.

General Liability

General liability is legal protection that will protect you against all manner of lawsuits. This is very important for any business, seeing as pretty much all organizations have a large ‘bullseye’ painted on their backs when it comes to lawsuits!

It’s actually even more important for restaurants though. Why? Because you are a commercial business that caters to the general public. People will be coming and going on your premises, which creates lots of opportunities for slips and falls. Not only that, but serving food is also something of a potential landmine. Not only is food poisoning a real issue, but so too are hot spills! And spills that people might slip up on. Are you sure you don’t want to take up something a little safer, like lion taming?

The idea behind general liability insurance then, is that if anyone should decide they want to sue you, you’ll at least be covered for the financial impact.

Another type of liability to consider is automobile liability. This of course will only be necessary for those restaurant businesses that also own a vehicle, and it’s also necessary to check that it isn’t already covered by your general liability. But either way, make sure to check and then seek out the insurance if it’s needed.

Other Types Of Restaurant Insurance

There are many more types of restaurant insurance that might be useful, depending on the nature of your business. For instance, if you have a large business loan, or a large mortgage, then you might want to get that insured.

It can also be a good idea to look into life insurance if you have a family business. This way, should anything happen to you, your life insurance will pay out and your family won’t be left unable to pay the bills and keep things running.

In fact, there’s insurance coverage out there for pretty much anything you can think of and that might include any specific large purchases. Every business is different, and this is especially true of restaurants. So, think about the way that your company operates and then make sure to get the best kind of insurance with that in mind.

Likewise, getting general income insurance can also be a very good idea. The idea behind this is that your actual profits are insured. If your restaurant should catch fire and burn down (heaven forbid), then your property insurance will cover that amount. But while that’s true, you also need to keep in mind that in the meantime, you aren’t going to be earning any money. That means that you might lose a lot of profit and even be unable to pay bills. The idea behind income insurance then, is that this would be covered as well.

Closing Comments

In short, smart businesses need to think ahead in terms of what could go wrong. Preparing for every eventuality is what will enable a company to be ‘resilient’. That way, no matter what happens to you and your business, you will be able to bounce back and come back even better than before.