Owning and operating a restaurant can be a dream come true for many entrepreneurs. However, it’s not without its fair share of risks. From kitchen accidents to customer slips and falls, there are numerous potential liabilities that can arise in the restaurant industry. That’s why having a comprehensive commercial insurance policy is crucial for protecting your business and its assets. While a standard commercial insurance policy can provide coverage for some common risks, it’s essential to consider additional endorsements that are specific to the unique challenges faced by restaurants. In this blog, we’ll discuss some key endorsements that a restaurant should look for in their commercial insurance policy.

  1. Liquor Liability Insurance:

If your restaurant serves alcohol, whether it’s a full bar or just a few wine and beer options, you need to consider liquor liability insurance. This endorsement is essential because standard general liability policies typically exclude coverage for incidents related to the sale or consumption of alcohol. Liquor liability insurance can protect your restaurant from claims related to injuries or property damage caused by intoxicated patrons, fights, or accidents involving customers who have consumed alcohol on your premises.

  1. Spoilage Coverage:

Restaurants often have significant amounts of perishable food inventory, which can be vulnerable to spoilage due to power outages, equipment malfunctions, or other unforeseen events. Spoilage coverage is an endorsement that can help reimburse you for the cost of replacing spoiled food items, saving you from substantial financial losses.

  1. Food Contamination and Foodborne Illness Coverage:

In the unfortunate event that your restaurant is involved in a food contamination incident or an outbreak of foodborne illness, you could face legal claims and damage to your reputation. Food contamination and foodborne illness coverage can provide protection against these risks, including the cost of recalls, legal expenses, and any resulting financial losses.

  1. Employment Practices Liability Insurance (EPLI):

Running a restaurant involves managing a diverse staff of employees. Disputes related to employment practices, such as wrongful termination, discrimination, or harassment, can lead to costly legal battles. EPLI can help protect your restaurant from these liabilities and cover legal fees associated with such claims.

  1. Cyber Liability Insurance:

In the digital age, the restaurant industry has become increasingly reliant on technology, including online reservations, payment processing, and customer data storage. This makes your restaurant vulnerable to cyber threats, such as data breaches or ransomware attacks. A cyber liability endorsement can help cover the costs of responding to a data breach, including notifying affected parties, credit monitoring services, and potential legal defense costs.

  1. Hired and Non-Owned Auto Insurance:

If your restaurant offers food delivery or catering services and uses personal vehicles for business purposes, you should consider adding a hired and non-owned auto insurance endorsement. This provides coverage in case of accidents or damage caused by your employees while using their own vehicles for work-related activities.

  1. Equipment Breakdown Coverage:

The smooth operation of a restaurant relies on various equipment, from stoves and refrigerators to HVAC systems. If any of this essential equipment breaks down, it can disrupt your business and lead to financial losses. Equipment breakdown coverage can help cover repair or replacement costs and minimize downtime.

  1. Business Interruption Insurance:

In the event of a covered loss, such as a fire or natural disaster, business interruption insurance can provide financial support to help cover ongoing expenses and lost revenue while your restaurant is temporarily closed.

  1. Outdoor Property Coverage:

If your restaurant has outdoor seating, a patio, or other outdoor property, it’s important to ensure that these areas are adequately covered. Outdoor property coverage can protect these assets from damage due to weather, vandalism, or theft.

  1. Employee Dishonesty Coverage:

While you may trust your employees, incidents of employee theft or fraud can occur. Employee dishonesty coverage can protect your restaurant from financial losses caused by dishonest actions by your employees.

It is important to work closely with an experienced insurance agent or broker who understands the unique needs of the restaurant industry to tailor a commercial insurance policy with the appropriate endorsements. Each restaurant’s insurance requirements may vary depending on its size, location, and specific operations. Investing in the right insurance coverage and endorsements will provide peace of mind and help safeguard your restaurant against unforeseen risks, allowing you to focus on what matters most – serving delicious food and creating memorable dining experiences for your customers. If you would like a comprehensive review of your current policies, or if you are a new restaurant owner, looking for guidance, we would be happy to come to your place of business. Contact us

Michael Vereecke

Agent/President, Customers First Insurance Group
586-576-9275