Under law, your restaurant is required to obtain specific types of insurance, while others are optional. The degree of insurance you have and the deductible (what comes out of your pocket before the insurance kicks in) you choose affects your premiums. The premium refers to the amount you pay for insurance. Converse with your insurance agent to ensure you get the appropriate coverage for your location. Here’s a look at some of the common restaurant business insurance, courtesy of One Fat Frog Restaurant Equipment…
• PROPERTY: this insurance protects your property in the event of various damage. Some property insurance covers specific damage, for instance flood, wind, earthquake, etc. Be mindful of the natural disasters in your area.
• GENERAL LIABILITY: This is a biggie. Liability insurance covers your tail in case someone sues you. Say if someone slips and falls on the sidewalk outside your restaurant. Maybe his shoes were untied or he’s just really uncoordinated – either way you can get sued for his fall. Get with your insurance agent and check your lease for any required minimums for liability insurance. Your insurance agent should also have some recommendations, based on your finances, for the appropriate amount of liability insurance.
• AUTOMOBILE LIABILITY: This insurance covers any lawsuits that arise from any employee (including you!) who drives a vehicle. Automobile liability should be included in your general policy, but double check with your insurance agent to see if you need additional “rider” insurance.
• LIQUOR LIABILITY: If you’ve got your liquor license, check with you local agency to see how much liquor liability you’re gonna need.
• WORKER’S COMPENSATION: In case an employee gets injured on the job, this insurance will take care of the medical bills.
• UNEMPLOYMENT INSURANCE: This covers out-of-work employees while they seek further employment.
The feds require that you have worker’s comp and unemployment insurance. While the others on the list aren’t required by law, it just makes sense to have them. You know the old adage, CYA? That’s what insurance is for.
Here’s a look at some of those “riders” you can add to policies…
• EMPLOYMENT PRACTICES LIABILITY: This rider will protect you against any cases of wrongful termination, sexual harassment, etc.
• FOOD CONTAMINATION: This is insurance for your food! What better rider for a restaurant? This will cover you if say a lightning storm knocks out the power and kills your refrigeration – spoiling your food.
• LOSS OF BUSINESS INCOME: If you lose any income due to an employment practices case, this’ll cover ya.
• SPECIFIC PERIL: Protect yourself from “perils” like earthquakes, floods, and anything else weather-related.
As you add on these riders, keep one eye on your premiums. More insurance is great, but huge premiums stink.
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