Are you a restaurant owner?
Then you have landed in the right space. We believe you know fire insurance is important for restaurant. But along with fire insurance, there are bundle of suitable policies for your restaurant. The cost of restaurant insurance can vary depending on several factors, including the type of insurance policy, the type of restaurant, and how the insurance company rates for that specific policy. Restaurants need fire, general liability coverage, property insurance, loss of income coverage, and other essential coverages specific to restaurants.
Factors Affecting Insurance Premium
Factors such as furniture inventory values affect premiums since larger spaces usually require more furnishings which increase replacement costs if damaged or destroyed. If you've invested heavily in renovations before opening doors at leased locations based on lease agreements or betterment and improvement clauses, you'll need to consider the value of those improvements when determining adequate coverage limits. Some insurers rate BOP based on gross sales. This means that as your sales increase or decrease annually, your premium will fluctuate accordingly. If you have an insurer that uses this method to rate your liability exposure, then higher sales will result in higher premiums.
On the other hand, some insurers use square footage as a basis for rating BOP policies. With this method, there is no variation in premium due to changes in sales volume; instead, it remains constant based on the size of your restaurant space. This approach can be beneficial if you want more predictability when budgeting for your insurance costs.
Apart from liability exposure ratings related to gross sales or square footage calculations with BOP policies comes another crucial aspect - property coverage within your policy. If you own the building where your restaurant operates from and include it in your policy coverage limits as part of property protection against damages or losses incurred by fire or natural disasters like floods or storms - expect significantly higher rates compared to just insuring contents within rented premises.
Liquor Liability Insurance
In addition to general liability and property insurance, another essential policy for restaurants is Liquor Liability Insurance. If your restaurant serves alcohol, this coverage protects you in the event that a customer becomes intoxicated at your establishment and causes harm or damage after leaving. It's crucial to add liquor liability coverage as part of your overall insurance plan.
Get Free Quote in Minutes
WC and Other Insurance Policies
The next policies restaurant owners should consider are Workers' Compensation (WC), Short-Term Disability (STD) Insurance, and Paid Family Leave (PFL). These policies are mandatory in most states with employees as they protect both workers and employers from financial losses due to workplace injuries or illnesses.
Workers' Compensation rates are typically based on payroll expenses; higher payroll will result in higher premiums. The rate percentage can range from 2% to 3%, depending on the insurer.
Short-term disability insurance provides income replacement for eligible employees who cannot work due to non-work-related injuries or illnesses but does not cover job termination issues like wrongful termination claims which would fall under Employment Practices Liability Insurance (EPLI).
Paid family leave combines short-term disability benefits with paid time off for new parents taking care of their newborns while being compensated partially through this combined policy.
It's important to note that these policies fluctuate based on changes in business conditions such as increased payroll expenses or workforce size.
Additional Insurance Policies
While we have discussed some key insurance policies every restaurant owner should have, it's worth mentioning additional coverages depending on specific situations:
1. Cyber Liability Coverage: With an increasing number of transactions happening online, protecting customer data has become crucial. This coverage addresses liabilities arising from cyberattacks or data breaches.
2. EPLI Coverage: This type of policy protects against lawsuits filed by former employees alleging wrongful termination, discrimination, harassment claims within a workplace environment.
3. Hired & Non-Owned Auto Liability: If your restaurant offers delivery services using vehicles not owned by the business itself, this coverage is necessary. It protects against liability claims arising from accidents involving