Must-have restaurant coverages

5 must-have coverages for restaurant owners

There are over 1 million restaurants in the U.S. today. While menus may vary, restaurants have specific insurance needs. Most owners choose a combination of coverage that helps them handle the high costs of everything from grease fires to injured diners who decide to lawyer up.

These five coverages can help you dodge bankruptcy and keep your kitchens open:

1. BUSINESS OWNER'S POLICY

A popular choice for newer restaurant owners because it packages several important coverages together – which allows them to save money while knowing that they’re not missing out on critical protections.

(Note: not all restaurants will qualify for a BOP because of their specific risks. You may have to purchase general liability, property and other coverages you want to include separately.)

Your business owner's policy should include:

General liability

Helps you cover legal costs and medical costs if you’re sued because:

Someone is hurt or their property damaged while they're in your restaurant
Someone objects to the words and images you use to promote your business

Many landlords, vendors and partners require you to carry general liability.

Examples:

A customer could slip on a spilled drink and faceplant into your floor
A customer could have an allergic reaction by eating or touching the wrong food
A server could accidentally spill wine on a pricey designer dress
A competitor could claim you stole their logo or copyrighted slogan

Property

Helps you repair or replace damaged or lost property if your business is hit by fire, theft, vandalism and other unwelcome disasters. This includes your physical space as well as business property like your furnishings, equipment, inventory, etc.

Examples:

If you fry food, you have an increased risk of a grease fire that could cause major damage in your space
A storm could flood your kitchen, damage your refrigeration units and cause serious food spoilage
The copper in your outdoor AC unit could be stripped out by someone hoping to sell it (yes, this actually happens)

Business interruption (an option in some BOPs)

Compensates your lost revenue if you have to shut down your restaurant for repairs because of covered property damage

2. WORKERS' COMPENSATION

Provides medical benefits and lost wages to employees injured on the job. This shields you from most employee lawsuits because workers' comp benefits are usually the exclusive remedy for workplace accidents. Required in most states if you have employees

Examples:

A server could spill a drink and then slip and fall on it
A kitchen worker could have a mishap with a knife or industrial mixer
An employee could strain their back or shoulder muscles from lifting heavy supplies

3. COMMERCIAL UMBRELLA

Insurance for your insurance! Covers you if you hit the limits of your general liability, workers’ comp or commercial auto. An umbrella helps you protect the assets of your business from being tapped next.

Examples:

A customer could sue after slipping on a dropped dessert, suffering a concussion and running up significant medical bills
The name of your restaurant could accidentally infringe on the copyright of a chain with deep pockets. If they sue, you could exceed your general liability limits on the legal defense costs alone
Your employee could be driving her own car to make a deposit for you at the bank and get into an accident. Several passengers in another car could be injured and sue your company.

4. LIQUOR LIABILITY

Helps cover legal and medical costs if someone purchases liquor from you, becomes intoxicated and causes damages or injuries. This is a necessity for any restaurant that serves liquor.

5. CYBER

Covers the high costs of a cyberattack that could compromise the private data of your customers and employees. Allows you to rebuild your system, pay regulatory fines (sometimes several thousand dollars) and hire PR to do damage control. The need for this coverage has only increased in the last few years as restaurants have increased their online presences.

Examples: Your customers’ credit card information/valuable data could be stolen when they participate in:

In-restaurant purchases
Rewards programs
Online orders

BUT NO RESTAURANT IS LIKE YOURS!

You may have specialized needs. Mylo can help you figure out the best plan to protect your restaurant. As a digital broker who partners with multiple top-rated carriers, we can give you an objective recommendation and find you the right coverage at the best value.

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The right coverage for you? Surprisingly simple.

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Protect what matters: your business

Why business insurance? That’s easy – it’s designed to keep you in business. When certain losses come along, you can dodge bankruptcy and stay on top of your game.

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Good news: if you’re a BOP holder, you always get the “special” top tier of business insurance. You’re platinum, baby! Learn more benefits & options.