What is restaurant business insurance?
Restaurant business insurance is coverage tailored to the unique risks and requirements of the hospitality sector. Also known as food business insurance, it protects a business financially from claims made by its customers as well as from other problems that can affect businesses more generally, such as damage to equipment and theft.
It may help a business more quickly recover from an unexpected problem, such as replacing lost income if a fire damages your kitchen. It may also help if your business is found liable for personal injury, such as if a customer injures themselves while slipping on a spilled beverage.
What does restaurant insurance cover?
Restaurant insurance can cover a range of inclusions that can be tailored to your unique circumstances. Typically, it covers public and product liability, which can be particularly beneficial for hospitality businesses as they sell goods that people consume. For example, if there is a problem that causes sickness, such as food poisoning, public liability insurance can protect the business from a claim.
Four other inclusions are commonly added to a restaurant business insurance policy.
Theft or damage to contents
This coverage of a business’s contents, which can range from furniture to food stock, can help protect the cost of replacing things if they are damaged or stolen. For example, if a fire starts in your kitchen, spoiling the food and damaging your tables, you may receive an insurance payment to cover the cost of replacement.
This inclusion may be relevant if your business operates in permanent premises, but it may not be relevant if you are a mobile food vendor or run a catering company.
Glass breakage
Restaurants, cafés and other food establishments may be more likely to have glass frontages than other businesses. Glass cabinets are also common to display goods and keep them warm or cool so they are ready to eat.
That said, glass can be more easily broken accidentally or maliciously damaged than other materials, and repairs can be expensive. Glass insurance can protect a business from breakage and may also allow for faster repairs.
Machinery breakdown
Your policy may cover the repair or replacement of specific equipment if it suffers an unexpected failure or breakdown. For example, a cool room at an ice cream parlour that fails during a heatwave, despite being recently serviced, may constitute an unexpected machinery breakdown.
Theft of the machinery is not typically covered under this inclusion, but it may be covered by contents insurance.
Commercial motor
Food vendor insurance with a commercial car or motor inclusion may cover the cost of vehicle problems if your business is mobile. It may protect you against damage and theft of your vehicle, as well as damage to another vehicle if you are at fault in an accident.
You may also be able to include equipment damage and theft under this part of a policy if you cannot elsewhere.
What types of businesses does restaurant insurance cover?
A range of hospitality venues and eateries can be covered by food business insurance, not just restaurants. It can cover cafés, coffee shops, juice bars and takeaway outlets. Catering business insurance protects caterers, no matter what site they work on, while food vendor insurance covers mobile outlets, such as coffee vans and food trucks.
Bakeries, cake-making shops and those who make food at home can be covered by food business insurance. If in doubt, insurers may be able to confirm if your business can be covered when you contact them to receive a quote. If not, they may be able to advise on a more suitable policy for your business.
Do you need restaurant business insurance?
Generally, insurance is an individual business decision, but in the hospitality industry, there may be other factors that require you to purchase it.
For example, businesses that lease premises may be required to take out a particular level of insurance as part of their lease agreement. This may be a glass cover to ensure the property is maintained to a certain standard if windows break.
Meanwhile, you may decide that the value of equipment is not worth insuring, yet you wish to have food liability insurance to protect your business from customer claims.
Before taking out insurance, consider your individual needs. The cost of the premium will vary, depending on what inclusions or exclusions you would like to have in your policy. It may help to talk to several insurers and receive several quotes so that you can find the best option for your business.
While restaurant business insurance may not be able to prevent problems from occurring, it can ensure you can financially overcome unpredictable challenges. By analysing and identifying your individual needs, you can trust that you can get the right level of insurance to protect you when problems arise.
