When running a restaurant, there are numerous expenses to consider, and one essential aspect is insurance coverage. Restaurant insurance protects your establishment from potential risks and liabilities, providing financial security in unexpected events such as accidents, property damage, or lawsuits. However, the cost of restaurant insurance can vary depending on several factors, including the size of your restaurant, its location, the type of cuisine you serve, the number of employees, and the coverage options you choose. Let’s discuss the factors that influence the cost of restaurant insurance and provide insights to help you estimate the potential expenses in securing comprehensive coverage for your restaurant. By understanding the cost considerations, you can make informed decisions to protect your business while managing your budget effectively.
What types of insurance coverage do I need for my restaurant?
A comprehensive assessment of the associated risks is crucial when determining the appropriate insurance coverage for your restaurant or bar. While each establishment is unique, common insurance policies are typically applicable, with general liability insurance and commercial property insurance being the two most popular types of insurance for restaurants.
- General Liability Insurance: This policy provides essential protection for your bar, guarding against lawsuits from foodborne illnesses, accidents, and other incidents. It covers legal fees resulting from customer injuries, allegations of slander or libel, and damages caused by your employees or business operations. General liability insurance also helps cover medical expenses incurred by customers.
- Commercial Property Insurance: Commercial property insurance is essential for restaurants as it safeguards your establishment against losses or damages resulting from theft, vandalism, fires, floods, electrical issues, storms, and other unforeseen events. It covers physical damage to your property and equipment, enabling you to recover quickly and resume operations.
Many bar owners bundle insurance like general liability insurance and commercial property insurance into a comprehensive package called a Business Owner’s Policy (BOP). This bundling option often provides cost savings. The cost of a Business Owner’s Policy for the restaurant is determined by various factors, including the value of the covered property, the bar’s location, the specific equipment used, and other relevant considerations.
While general liability insurance and commercial property insurance form the foundation of insurance coverage for restaurants, it’s important to assess additional risks associated with the bar environment, such as liquor liability. Consulting with an experienced insurance agent can help tailor insurance solutions to address these unique exposures, ensuring comprehensive protection for your bar against potential risks and liabilities.
How Much Does an Owner’s Policy for a Restaurant Business Cost?
A Business Owner’s Policy (BOP) combines necessary insurance policies and provides a practical and economical option. This comprehensive coverage frequently includes commercial property, general liability, and business interruption insurance. The business’s location, the equipment’s cost, other covered assets, and other pertinent considerations all affect how much a BOP will cost.
The prices connected with a business owner’s policy for restaurant insurance often range from:
- Average around $180 per month, or $2,160 per year.
- Most insurance contracts have an annual range of $1,100 to $10,500.
It’s important to note that these figures are general estimates, and the actual cost of a Business Owner’s Policy for a restaurant may vary based on the specific circumstances and unique aspects of the business. Working with an experienced insurance provider or agent can help determine the most accurate pricing for the desired coverage, considering factors such as the size of the establishment, the scope of operations, and any additional coverage needs specific to the restaurant industry.
How much would annual insurance for my restaurant cost?
This leads to huge variations in the typical restaurant insurance cost. A Business Owner’s Policy, workers’ compensation insurance, and liquor liability insurance premium for the majority of restaurants are typically around $4,000.
Here’s the information for annual insurance for restaurant costs:
| Insurance Policy | Average Annual Cost | Average Monthly Cost | Cost Range |
| General Liability Insurance | $900 | $80 | $500 – $2,500 |
| Commercial Property Liability Insurance | $740 | $60 | $500 – $2,500 |
| Workers’ Compensation Insurance | $1,500 | $150 | $600 – $10,000 |
| Liquor Liability Insurance | $600 | $50 | $300 – $3,000 |
If your restaurant could benefit from products such as equipment breakdown insurance, liquor liability insurance, or commercial auto insurance, you should add a restaurant endorsement to your general liability coverage. This results in a strong company Owner’s Policy, which reduces the overall cost of your small business insurance.
How Much Does General Liability Insurance Cost for Restaurants?
General liability insurance covers a variety of risks, including slip-and-fall accidents involving customers, property damage brought on by your staff or equipment, copyright or advertising liabilities, and more. The size of your business determines costs.
| General Liability Insurance for Restaurants | Average Annual Cost | Average Monthly Cost | Cost Range |
| Coverage for slip and fall injuries, property damage, copyright/advertising liability, and more | $950 | $80 | $500 – $6,000 |
What type of insurance do I need to start a restaurant?
When starting a restaurant, you should consider several types of insurance to protect your business and mitigate potential risks. General liability insurance is crucial as it covers customer injuries, property damage, and advertising liabilities. Property insurance is necessary to safeguard your physical assets, including the building, equipment, and inventory. Workers’ compensation insurance is essential if you have employees, as it covers work-related injuries or illnesses. Additionally, you may need liquor liability insurance if you serve alcohol and business interruption insurance to protect against unforeseen events that could disrupt your operations. Obtaining these insurance policies can help ensure your restaurant’s financial stability and security. It is recommended to consult with an insurance professional to determine the specific coverage needs of your restaurant based on its unique characteristics and location.
How much does bar insurance cost?
It doesn’t matter if you own a tavern, saloon, or nightclub; being known as a place that primarily offers alcoholic beverages entails hazards beyond those of a regular dining facility—an additional expense, like getting a liquor license, results from increased risk. Prepare to pay more money on bar insurance than for other businesses, such as cafes, as there may be a rise in restaurant liability insurance and insurance premiums and deductibles.
Since the typical cost of combining workers’ compensation, liquor liability, and a business owner’s policy is roughly $4,000, insuring a bar will fall somewhere in that range.
What insurance providers offer coverage for restaurants?
Regarding restaurant insurance, general liability coverage is of utmost importance. Given the nature of serving food and beverages, the risk of potential lawsuits due to foodborne illnesses is a constant concern.
Other types of restaurant insurance coverage you may require include:
| Coverage Type | Description |
| Business Interruption Insurance | Provides coverage for lost income and additional expenses when your restaurant cannot operate due to a covered event, such as a fire. It helps replace your income and covers costs like temporary relocation to ensure business continuity. |
| Commercial Crime Insurance | Protects your restaurant from losses resulting from various crimes, including burglary, forgery, fraud (including computer fraud), robbery, and employee dishonesty. It provides financial support to recover from crime-related financial losses typically not covered by commercial property insurance. |
| Extra Expense Insurance | Covers additional expenses incurred due to an unforeseen event, such as the need to rent temporary quarters if your restaurant has to relocate temporarily. It helps with costs beyond normal operations and ensures you can continue your business smoothly during challenging circumstances. |
| Food Contamination Endorsement | Offers coverage when your restaurant is forced to close by a health board due to a foodborne illness outbreak. It covers expenses like lost income, replacement of contaminated food, medical tests and vaccinations for employees, equipment cleaning, and advertising efforts to restore your restaurant’s reputation. |
| Food Spoilage Coverage | Protects against financial losses caused by incidents beyond your control, such as long power outages or refrigeration equipment failures, resulting in food inventory spoilage. This coverage helps reimburse the costs associated with the loss of perishable items and ensures minimal impact on your business. |
| Liquor Liability Coverage | Specifically designed for establishments that serve alcohol, liquor liability insurance provides protection against bodily injury or property damage caused by intoxicated customers who were served alcohol at your restaurant. It safeguards your business from potential legal claims and related expenses. |
| Mechanical Breakdown | Covers the expenses of repairing mechanical breakdowns in critical equipment, including boilers, piping, and electrical machines. This coverage helps ensure the smooth operation of your restaurant by taking care of repair costs and minimizing downtime. |
| Workers Compensation Insurance | Required by most states, workers’ compensation insurance provides coverage for employees who become sick or injured while performing job-related duties. It helps cover medical bills, physical therapy, lost wages, disability, and death benefits, providing financial support and protection for employees and employers. |
The Most Affordable and Save Money on restaurant business insurance with The Horton Group
There is no one-size-fits-all restaurant insurance, even though these average restaurant insurance costs provide a broad sense of how much money you may need to spend on covering your small business. A tailored restaurant insurance quotation from The Horton Group will offer the greatest coverage alternatives while maintaining a cost that safeguards your bottom line.
Call our trained agents or obtain an online estimate today to find out precisely how much to budget for restaurant insurance next year. The Horton Group is a nationally recognized insurance broker, named by Crain’s Business Insurance as one of the 50 largest in the country, providing insurance to restaurant and bar owners nationwide. We can cook up a generous quantity of coverage to fulfill your desire for protection.
Material posted on this website is for informational purposes only and does not constitute a legal opinion or medical advice. Contact your legal representative or medical professional for information specific to your legal or medical needs.
