What restaurant insurance covers

The property section insures what you own inside the space: ovens, hoods, refrigeration, furniture, point-of-sale hardware and inventory, plus the improvements you paid for in a leased building, such as the build-out of the kitchen and the bar. Fire is the headline peril, and carriers ask about the hood and duct cleaning schedule and the automatic suppression system before quoting. Equipment breakdown coverage, added to the property section, pays when a compressor, a dishwasher or the hood's electrical panel fails from an internal cause that a fire policy would otherwise exclude.

General liability pays when a guest is injured on the premises or by your product: a fall on a wet floor, a burn from a hot plate, an allergic reaction to an undisclosed ingredient, or a group of guests made ill by a contaminated batch. Products and completed operations coverage is what responds to the illness claims, and it follows the food out the door with catering and delivery orders. Some carriers offer a contamination extension that pays the cost of closing, cleaning and restocking after a health-department order, which the standard liability form does not.

General liability excludes injury caused by serving alcohol to anyone who then hurts themselves or someone else. Liquor liability fills that exclusion. It pays when a guest you served drives away and causes a crash, or assaults another patron, and a claim is brought against the restaurant for having served them. Each of the four states has its own law on when a server can be held responsible, and the limit the licensing authority or landlord asks for is often as large as the general liability limit itself.

The premium for this part is driven by the share of sales that is alcohol, closing time, entertainment and whether staff hold a recognised server training certificate. Assault and battery exclusions are common on cheaper forms and are worth reading before choosing a quote, because a bar fight is one of the more frequent claims.

Spoilage coverage pays for the contents of walk-ins and freezers when refrigeration fails from a mechanical breakdown or a power outage, and it is not included in a basic property policy. It is written with its own limit, usually set from the value of the inventory you carry on a busy weekend. Utility service interruption is the companion coverage: it pays lost income when a power or water outage away from your premises closes the restaurant, subject to a waiting period and, on some forms, a requirement that the damage to the utility be from a covered cause.

Business income replaces the net income and continuing expenses, including payroll and rent, while a covered loss keeps the restaurant closed, and extra expense pays to operate from a temporary location. The period of restoration and any monthly limit decide how long it actually carries you. Workers compensation covers a kitchen's burns, cuts and back injuries and is required for employees in each state under its own rules. If staff deliver in their own cars, hired and non-owned auto coverage is the endorsement that responds when they cause a crash on a run; a personal auto policy may not.