Why Restaurant Insurance Is Helpful for New Restaurant Owners
Purchasing insurance coverage for your new restaurant can help protect you against losses that result from liability and property risks. Restaurant insurance coverage applies to various types of businesses, including taverns, restaurants, coffee shops, diners, cafes, and food trucks. Here are some reasons why it’s helpful to obtain this insurance as a new restaurant owner:
Safeguards Against Property Damage
Restaurants face numerous risks, including theft, vandalism, robbery, and kitchen fires, which can result in property damage. A restaurant’s kitchen appliances range from freezers and refrigerators to ovens and dishwashers. These appliances may malfunction unexpectedly, forcing you to incur unplanned expenses. General liability insurance and property insurance help cover the repair or replacement expenses that result from property damage caused by these risks.
When evaluating commercial property insurance for your restaurant, you can choose an open perils or a named perils package. A named perils package is tailored to protect against the particular risks listed in your restaurant insurance policy. An open perils package is more comprehensive; it covers all risks except those that are specifically excluded.
See also: Typical Commission Rates Charged by Business Brokers to Sell a Business
Covers the Staff and Customers
When customers visit your new restaurant or when you hire new staff, you become partially responsible for their safety and well-being. They are vulnerable to accidents such as cooking-related burns, food poisoning, slips and falls, or strains and sprains. Workers’ compensation is a type of restaurant insurance that can help protect your employees against injuries on your premises. This insurance covers medical expenses, rehabilitation, and lost wages if an employee is injured or becomes ill due to their work. It may also provide disability benefits if the injury causes a temporary or permanent inability to work. General liability insurance helps protect your business if a customer is injured on your premises, such as from a fall or other accident. It can cover medical bills, legal defense costs, and settlements.
Protects Against Liability Claims
Customers, vendors, or visitors can file claims against you for incidents that occur while they are in your restaurant. These claims come with associated legal expenses, including attorney fees and administrative or court filing costs. Obtaining the right insurance helps cover these costs and prevents potential interruption or closure of your new restaurant’s operations. Here is how different types of restaurant insurance can help protect you against potential legal claims from these third parties:
General Liability Insurance
General liability may compensate customers who claim that you or your staff caused damage to their personal property. This insurance protects against third-party liability if a rented restaurant property is damaged by fire, vandalism, or other incidents. It also offers protection against claims for negligence and libel. This insurance is suitable for new restaurants that host large numbers of customers or operate in high-risk environments.
Errors and Omissions Insurance
E&O insurance protects you if a third party claims that negligence on your part, through a mistake or omission, caused them harm. Coverage may include losses such as a claimant’s lost investment, lost revenue, or the cost they paid for the product or service. E&O insurance addresses negligent practices, such as providing incorrect professional advice or delivering inadequate products or services. If your restaurant fails to deliver hot food to a wedding reception at the agreed time, this insurance can help protect you against potential liability from the client.
Obtain Restaurant Insurance Today
Restaurant insurance helps keep your new business running smoothly by protecting against potential legal claims and financial losses. Factors such as your restaurant’s size, operating hours, claims history, sales volume, and location can all influence your coverage needs. Contact a reputable restaurant insurance agency today to get the protection your business needs.
