Restaurant Insurance, Explained

Common types of cover

• Property for the building improvements equipment and inventory
• General liability for guest injuries and property damage
• Liquor liability if you sell or serve alcohol
• Food spoilage and equipment breakdown
• Business income after a covered loss
• Workers compensation for employees
• Hired and non-owned auto for deliveries in personal cars
• Employment practices liability

Owners and tenants

Most restaurants lease their space. The lease decides who insures the building, who insures improvements you install and what liability limits the landlord expects. Read the insurance section of the lease before requesting quotes, and plan to name the landlord as an additional insured if the lease requires it.

Packages versus separate policies

Smaller restaurants are often written on a package policy combining property and liability, with options for spoilage and equipment breakdown. Liquor liability, workers comp and auto are usually separate. Larger or higher-risk operations, such as late-night bars, may need individual policies.

What underwriters look at

Insurers ask about cooking methods, fire suppression and hood cleaning, alcohol sales as a share of revenue, hours, entertainment such as live music or dancing, delivery operations and prior claims. Accurate answers help match you with insurers that write your kind of place.

Delivery and catering

If staff deliver food in their own cars, the restaurant can be named in a lawsuit after a crash. Hired and non-owned auto coverage addresses that risk. Off-site catering may need its own liability terms.

Key risks

Frequently asked questions