 Restaurants face a range of liability issues from the moment they open their doors. From customers to employees and managers, it’s important for restaurants to have an insurance policy in place to combat possible lawsuits. A single lawsuit can cost millions of dollars, and most restaurants—especially start up restaurants—can’t afford these expenses out of pocket.
There are many types of commercial liability insurance available that serve different purposes. Many of these are required by state laws, depending on where the business is located. Be sure to check with your state about the proper liability insurance limits you must have.
General liability insurance is the most basic and common type of liability insurance. This insurance covers claims regarding bodily injury and property damage to a third party that occur on the restaurant’s property. For example, say a hot plate burns a customer’s hand. That customer can then seek compensation for medical bills relating to the injury. A general liability insurance policy will help with this cost.
Product liability insurance also covers bodily injury and property damage, but this covers items offered or sold by the restaurant. This can also cover if food from the restaurant makes someone sick or gives them food poisoning.
Most restaurants sell alcohol in some capacity, which comes with its own dangers. Although every bartender and server should be trained not to overserve, accidents can happen. If someone who was drinking at your establishment leaves and causes a car accident, the fault can fall back to the restaurant. Liquor liability insurance can help with the legal expenses in this case.
Commercial Auto Liability
Some restaurants have delivery services or otherwise use vehicles for work purposes. Even if employees use personal vehicles, they won’t necessarily be covered by their personal auto insurance policy. Commercial auto insurance can offer liability coverage for vehicles in case the driver causes bodily injury or property damage while operating the vehicle for work purposes.
Instead of covering claims concerning customers, workers compensation covers claims against the restaurant filed by an employee who is injured on the job. Between cooks working with hot fryers plates and burners, and servers walking across slick floors both in the kitchen and the dining room. Workers compensation can provide coverage for:
This insurance is required in most states, though requirements often depend on the number of employees working for the business. This insurance can help replace employee’s lost income while they’re unable to work and prevent lawsuits by covering compensation.
Employment Practices Liability
Employment practices liability insurance (EPLI) often comes as an endorsement for other insurance policies. EPLI covers claims against the business concerning certain HR practices. Claims may range from discrimination, sexual harassment, failure to promote, wrongful firing or hiring and more.
Crime insurance protects the restaurant in case an employee steals from the restaurant.
Many of these coverages can be combined into a business owners policy (BOP). A basic BOP combines general liability and property coverage into a more affordable policy for small businesses, but it can be customized with coverages and limits perfect for your restaurant. Larger businesses may prefer a commercial package policy (CPP), which allows for more flexibility when it comes to coverage limits.
All restaurants are different when it comes to dangers that their location and specialties offer. Hibachi grills, for example, may need higher general liability insurance in order to cover the additional injury risk concerning the fire aspect.
Posted Thursday, June 25 2020 2:56 PM
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