The Complete Guide to Restaurant Insurance Cost and Coverage


Cooking is a great hobby, and many of us are passionate about this hobby. However, for some of the readers of this post, cooking may also be a business and a livelihood. Cooking for a few friends in your kitchen is one thing. However, taking on a dinner rush as a restaurant owner is a different ball game altogether. Chaos involved in this entire process often leads to frantic decision-making. This is when things can start getting dicey from a business perspective. Whether you run a large burger chain or just a tiny juice bar, a restaurant insurance policy covering every potential risk is essential. 

What is Restaurant Insurance Cost?  

There are two types of restaurant insurance costs for liability owners: general property and 2nd one is commercial insurance costs. It depends on your criteria which one location you have to confirm to start a food point to cover a wide range of business areas.

Here are the following general, business and commercial insurance costs:

  • Business Owner’s: Starting cost of $150-$180 / Month or $2000+ annually cost
  • General Liability: Starting cost of $70-$90 / Month or $900+ annually cost
  • Commercial: The average cost of $65 / Month and expected to reach $700+ yearly
  • Workers: It’s also compulsory to have insurance for workers during sudden incidents such as injuries of burns, cutting, punctures and scrapes. Worker starting insurance costs $120 per month or up to $1500 annually.   

Simply put, restaurant insurance cost may be defined as a combination of coverages to protect a restaurant’s customers, properties, employees, and inventory. Each restaurant has its own set of risks, and the insurance can be tailored accordingly to protect the business. 

Unfortunately, it is very difficult for a business to plan for potential disasters. While running a busy restaurant, bad things are bound to happen. A proper insurance policy can shield your restaurant from several mishaps such as:

  • Damage or loss of equipment, property, and inventory.
  • Food poisoning results from improper handling of ingredients.
  • A drunk-driving accident results from overserving a customer.

Restaurant Insurance Coverage:

Restaurant insurance policies generally provide a combination of different types of coverage. According to Charles River Insurance, the most common coverages found in these policies include 

  • Coverage for the physical assets of the building against fire, natural disasters, and theft.
  • Coverage for spoilt inventory because of a power outage or other mishaps
  • Coverage for someone getting hurt inside the restaurant premises, including food poisoning. 
  • For alcohol, sellers range from intoxicated customers hurting themselves or someone else.
  • Coverage for lost wages and medical costs of employees injured on the job.
  • Coverage for damage to customers’ cars for restaurants offering valet service. 
  • Equipment repair and replacement costs resulting from mechanical breakdown and power surges.

Points to Consider: Like every other business operation, restaurants have their own intricacies. This is why several factors must be considered while purchasing an insurance policy for a restaurant. With too many options available these days, the selection process can be time-consuming and overwhelming. Mentioned below are some of the points for you to consider.

  • First and foremost, identify the potential areas of risk depending on the nature of your restaurant business. If you don’t know what you are up against, you will not be able to protect your business. Assess all your products and services and vulnerabilities that may impact your business operations. 
  • The following important task for a restaurant owner is to understand the types of insurance. They should consider various kinds of insurance, including general liability, commercial property, worker’s compensation, crime, etc. 
  • One should also figure out the different factors that may impact the price of a restaurant’s insurance policy. While determining the cost of insurance, insurers generally look into factors such as operating hours, type of property, location, the sale of alcoholic beverages, activities or services being offered, and years in the industry. 
  • While choosing insurance, many people make the mistake of choosing the cheapest option. However, an affordable policy may cost the business much more if an uncovered or under-covered claim is filed. Therefore, don’t buy an insurance policy just because it is inexpensive. Thoroughly look into the coverage and purchase something that provides adequate business protection against substantial financial losses. 
  • Finally, read the fine print before selecting a policy for your restaurant. It is a daunting task to read over an insurance policy, but this is a must for understanding the coverage and its inclusions and exclusions. 
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