Whether your own or operate an existing restaurant or you have plans to open one, there are many logistical realities to consider. One such issue is the insurance necessary to any business, as well as other specializations due to being in the food service industry. Keep reading for a crash course on insuring a restaurant, courtesy of the experts here at ARC Insurance Brokers.
Commercial insurance is an umbrella term that is widely used to refer to the general liability that all businesses must cover in order to operate legally. Think of this as “slip-and-fall” protection, as commercial insurance policies anticipate many more diverse issues than standard home or property coverage. Businesses cannot exist without clients, so commercial insurance standards are usually government-regulated in order to protect the public.
Restaurant insurance is another general term used in place of what insurers actually offer-- bundled specialty policies designed to best fit a business that serves food. The core of these policies are typically built around property insurance that protects the actual structure of the restaurant. In addition to this, restaurant insurance may be tailored to include coverage for:
- Specific peril: This includes such issues as food spoilage due to power outage, contamination from pests or other problems unique to food service businesses. This part of the policy can often scale up or down to match the value of peril your restaurant experiences.
- Life insurance: While you may overlook this type of protection, restaurants can incur serious debts in order to eventually turn a profit. All business owners should consider a packaged plan that includes coverage for your loved ones should the worst happen.
- High-end, large scale or custom equipment: No matter how exotic, anything can be insured-- and usually at a fair price when you consider the expense of replacing it. Restaurants are often home to extremely specialized equipment that requires major up-front investment. Losing such an item without coverage could mean the end of the business.
- Specialty, imported or seasonal food product: Many restaurants are successful because they offer a unique taste or experience-- which often relies on good access to a limited resource. If a product is only available for part of the year and your business depends on it, you may be eligible for a special policy.
- Vintage or aged items such as valuated wine, spirits and cheese: Especially vital to the hospitality and fine-dining industries, comprehensive wine, spirits and cheese lists can be costly to maintain. Many of these items have to be ordered well in advance and kept in optimal conditions. An insurance policy to protect these delicate, valuable items is a wise investment for a restaurant owner or operator.
- Automobiles: If your restaurant uses by vehicles in any way-- whether they are owned by the business or not-- your successful operation relies them working properly when they are needed. Restaurant insurance policies can be outfitted to cover the business’s own vehicles, as well as private vehicles used by employees to further the interests of the business.
- Loss of income due to business interruption: While the damage caused by a catastrophic incident is likely covered by your greater property insurance, you may not be entitled to the income lost due to business interruption. Special clauses can be added to your restaurant insurance to make up for gaps in cash flow or even pay employees during an unexpected closure.
As you can see above, there are many ways restaurants can be insured to protect their owners, operators, employees and vendors from unexpected situations. The food service business is a risky one, so it is important to always ensure your investments are properly insured. Questions? Concerns? Contact or visit ARC Insurance Brokers today-- our commercial and restaurant insurance experts are happy to walk you through all of the available options.