Restaurant Insurance: Cost, Quotes & 101

So, you want to start a restaurant... or you already have one, and struggling due to the recent pandemic. However, as life begins to get back to normal, and new ways of ordering food have become more common (delivery, socially distanced dining, home food business and reservations), the restaurant industry is making a huge comeback.

There is also a greater number of government loan programs and low-interest SBA loans that you can apply for that can help you get your restaurant off the ground! 

One of the most important things that many restaurant owners forget to incorporate into their budgeting and planning is restaurant insurance. Just like any other business, you'll need to at least have general liability coverage and possible extra coverage, depending on your needs.

Restaurant insurance can help protect your business from the unexpected and ensures that not a single mishap breaks the bank. Not only is it smart to insure your restaurant business, but most city ordinances, landlords (if you rent your space), and banks (if you pay a mortgage on your space) require you to have your business and property properly insured.

Below, we'll cover and answer some of the most commonly asked questions regarding restaurant insurance, its average cost, important information and give you a brief breakdown of restaurant insurance coverage and the different types of insurance restaurants need. Once you feel knowledgable enough and ready to find restaurant insurance near me, you will be able to easily compare quotes and get the best restaurant insurance quote that you are looking for using the get quotes button. Let's get started!

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Frequently Asked Questions

First, let's take a few minutes to review some of the more common questions regarding restaurant business insurance, the average restaurant insurance cost, and what kind of restaurant business insurance you may need.

Who Needs a Food or Restaurant Insurance Policy?

No matter what type of restaurant or eatery you own, it's a good idea for your financial safety net to have insurance. Even if you have a small home-based business that caters to small parties, having a basic restaurant general liability insurance policy is the best way to ensure that you never find yourself in over your head. Business in need of restaurant insurance coverage could include:

  • Coffee shop

  • Food trucks

  • Deli

  • Pizza shop

  • Tea room

  • Franchised restaurant

  • Private restaurant

  • Catering service

  • Small restaurants

  • Large restaurants

  • Bar or pub

  • ...and many others!

Basically, if you serve food and have a business license, then you should have restaurant liability insurance, at the very least.

What Kind of Insurance do Restaurants Need?

The most basic kind of commercial restaurant insurance is general liability insurance coverage, which helps cover any costs associated with a guest being harmed in your place of business. Whether they trip and fall or get sick from the food, this coverage ensures that you won't pay their medical bills out of pocket. There are also some additional types of insurance that restaurant business owners should consider. So keep reading, because these are discussed below!

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How Much Does it Cost to Insure a Restaurant?

For many of you who wonder how much is insurance for a restaurant, the average restaurant insurance cost per month is $171 ($2,050 per year total). Of course, the answer to the question 'how much does insurance cost for a restaurant?' could vary significantly, depending on the size of your business, the city and zip code you're located in, and what type of restaurant you are.

Restaurant Liability Insurance Cost

The average restaurant liability insurance cost is $68 per month or $800 per year for commercial general liability insurance. Restaurant general liability insurance protects restaurants from customer property damage and injuries.

How Much is Insurance for a Small Restaurant?

If you have a really small restaurant such as a corner deli, bakery or cooking business, coffee shop, pizza shop or an in-and-out cafe that doesn't take up a lot of space or serve a huge number of customers, then you may only need a small restaurant insurance policy. For example, deli insurance, pizza shop insurance and other types of small restaurant insurance premiums could get as low as $50 a month in terms of cost!

How do I Ensure my Franchise Restaurant?

If you're looking for franchise restaurant insurance, be it Subway insurance, American Deli insurance, Dairy Queen insurance, McDonalds insurance, or trying to insure any other franchised restaurant, then the process is no different than any other restaurant.

The only difference is that the Franchise's corporate regulations may require you to purchase additional insurance, based on their company policy. In some cases, your franchise sponsor may even be able to connect you with lower-cost insurance through their corporate insurers.

Restaurant Insurance Coverage: Types of Insurance for Restaurant Owners

Hopefully, we managed to answer some of the more pressing questions you had. Now, let's take a few minutes to explain the different types of insurance for restaurants and the small business insurance coverages that you need to protect your business by having a restaurant insurance policy.

Restaurants typically have a higher degree of risk than a standard retail service so they usually need extra coverage to ensure that the business is fully covered for all of their various services, and risks.

Restaurant Liability Insurance: General Liability Insurance for Business Owners

General liability insurance is meant to cover any claims that customers make regarding the safety of your restaurant. It could cover any of the following scenarios:

  • A sign falls on your customer's head.

  • A toothpick gets stuck in your customer's throat and they have to go to the doctor.

  • A customer slips and falls after you've mopped the floor.

  • A chair leg breaks and causes the customer to fall.

  • Hot coffee or tea is spilled on the customer.

General liability coverage is vital if you want to ensure that you don't get sued over customer injuries or property damage.

Read more about commercial general liability insurance coverage (CGL insurance)

Commercial Property Insurance for Restaurants

In addition to insuring yourself against customers, you'll also want to insure your property against damage. One of the most common things that can happen in any kitchen is a fire. Even a small fire can cost tens of thousands in repairs, and commercial property insurance for restaurants can save you a ton of money in that case. Commercial property insurance for restaurants can also cover you against floods, hail, vandalism, and other unexpected events that may disrupt your restaurant business operation.

Read more about commercial property insurance

Restaurant Business Interruption Insurance (Business Income Coverage)

If you're a restaurant that relies on a steady stream of customers, then restaurant business interruption insurance policy is a good insurance coverage to consider. If you're ever forced to shut down the business for a short amount of time (for instance- a global pandemic, extreme weather, or riots in the street), then business interruption insurance for restaurants can help pay your bottom line so you don't lose money during this time period.

Read more on business interruption insurance

Commercial Auto Insurance (For Delivery, Catering, and Food Trucks)

If your business uses any type of vehicle, then you'll want to purchase a commercial auto insurance policy for each vehicle. Whether you have your own delivery cars, catering vans, or you operate a food truck, having your autos properly insured is vital in the event that there's an accident.

Read more on commercial auto insurance

Liquor Liability Insurance

If your bar serves liquor, then it's a good idea to have liquor liability insurance. This is a highly recommend insurance for restaurants and bars, as it covers any damage caused by intoxicated individuals at your bar. For example, it could cover the following instances:

  • A drunk customer cuts themselves on a glass they broke.

  • A drunk customer starts a violent fight in your establishment.

  • A drunk customer throws a rock at the window or breaks an expensive bottle of liquor.

Workers Compensation Insurance for Restaurants

Last but not least, you'll need workers' compensation insurance coverage for restaurants. In most states, this is a legal requirement for business operations that have more than four employees. Essentially, this covers any medical bills or lost wages if one of your team members is hurt or injured on the job.

Read more about workers compensation insurance

Mostly, BOP (Business Owners Policy) insurance will cover some of the most important coverages a business needs, but you'll have to make sure that the coverages that are important for your business are included in it.

Best Restaurant Insurance Companies and Brokers

To help you find the best insurance for restaurants, you can use the get quotes button and compare quotes from the best restaurant and business insurance companies.

Compare Restaurant Insurance Quotes

Get all the best quotes from leading providers in a click of a button!

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