As with any business, buying the proper insurance among the most important things you can do if you own a restaurant. Standard commercial insurance policies do not usually provide sufficient coverage for the legal and financial risks involved with owning a restaurant. Therefore, you should look for a policy written specifically for restaurants that includes certain important coverage.
Building Coverage
If you own the building in which your restaurant operates, you need an insurance policy that provides coverage if the building is damaged or destroyed. If you do not own the building, the owner should have an insurance policy that covers the building. However, you will need a policy that covers improvements you make to the building, because the owner's insurance policy may not cover them.
Business Personal Property
Business personal property is any item not permanently attached to the building which is used for business purposes. When you buy an insurance policy for your restaurant, you should make sure that you buy a policy that fully covers the cost of the property if there is a covered loss. Business personal property includes such items as computers, cash registers and maintenance equipment.
Business Interruption
If you temporarily close all or part of your restaurant due to covered loss, having business interruption insurance will compensate you for your loss of income. In addition, the coverage pays many of your ongoing business expenses, like payroll and utility bills, until the restaurant is re-opened. If you do not own the building and are able to find a suitable replacement, business interruption coverage may pay for the costs associated with moving your restaurant to the new location.
Crime
Most standard business insurance policies provide coverage if someone breaks into the building and vandalizes it, or steals its contents. However, not all policies provide coverage for such things as employee dishonesty or customers using stolen credit cards. To protect your business against those acts, make certain that you buy a policy that covers criminal acts committed by employees and customers.
General Liability
General liability insurance provides you with protection if you or one of your employees commits a negligent act that leads to someone's injury, or to damage to someone's property. A common type of liability claim made against restaurants is for food poisoning. If the food prepared by your restaurant cased illness in one or several customers, general liability insurance will compensate the customers, and pay for your defense if someone files a lawsuit.
Worker's Compensation
Depending on the number of people you employ and the state in which your restaurant operates, you may be required to purchase worker's compensation insurance. Even if it is not required, you should consider purchased worker's compensation insurance to cover your employees if they sustain an injury while at work. The injured employees' medical bills and lost wages may be your legal responsibility if you do not have this coverage.
