General Liability Insurance for Food Services Professionals
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General Liability and Property Insurance for Restaurants and Catering Businesses

Because so many people come and go from your restaurant daily, general liability insurance is a must. Accidents can and do happen, both at your restaurant and at off-site catered events. If someone should sue your business as a result of a real or perceived loss, the high cost of a legal defense and settlement could be enough to put you out of business.

If, for example, someone slips on a wet floor inside your establishment and breaks a hip, has an allergic reaction or food poisoning after dining at your establishment, or is accidentally scalded by a hot beverage at your restaurant, your business could face a lawsuit. General liability insurance protects you against these types of bodily injury claims as well as claims related to others' damaged property. General liability insurance can also protect you from liability arising from injuries or property damage that happens at other locations, such as off-site events your business may cater. So if your food-warming equipment were to accidentally start a fire at a wedding reception, for example, any resulting lawsuits should be handled by your policy.

To cover physical damage to your own and others' property, you'll also need a good property insurance policy. In the food service industry, you will find numerous optional coverage endorsements that are available based on your specific business and risks. For example, some policies may cover your own business property – including your building, signage, computer systems, equipment or furnishings – as well as other people's property in your care, custody or control. Special endorsements may also be available with some carriers to cover cars in your valet lot or jackets in your coat check.

Many food service businesses purchase a package policy called a Business Owner's Policy, or BOP, which combines general liability insurance coverage with property insurance for a single affordable rate.

What Business Owner's Policies Cover

Unfortunately, lawsuits have become prevalent in food service, so general liability insurance is one of the most frequently purchased types of insurance in this business. General liability insurance policies are designed to pay your legal defense costs, bond premiums, and court-ordered settlements. They also cover hidden expenses, such as lost income while you are defending yourself in court.

Property insurance is another of the most commonly purchased types of insurance for food service businesses because it's very affordable, and it's often required by landlords who rent restaurant or commercial kitchen spaces. Common property claims in the restaurant business include fire, disasters such as tornadoes, and theft. It typically covers the physical loss of your business space and its contents, as well as others' property in your care, custody or control. It may also cover loss of business income if your business is forced to close due to a covered loss, as well as expenses associated with re-opening your business in a new or temporary location.

Some food service businesses opt to purchase a BOP that comes with Business Interruption or Food Contamination Coverage, in case they should have to temporarily close their business due to food contamination or food poisoning. It covers the costs to replace contaminated food, clean equipment, handle potential public health official expenses, and even support advertising to help restore your business's reputation. Some BOPs also include identify theft recovery for business owners/policyholders, including a help line, case management, and expense reimbursement.

Just as your menu differs from other restaurants and caterers, so does your food, equipment and operations. Because policies and coverage vary by carrier, it's helpful to get expert advice on the best insurance options for your unique food service business. Business Insurance Now's licensed agents are happy to assist you in selecting the right coverage for your business, including appropriate property coverage endorsements (or add-on options) exclusively for food service businesses. Some of these options include:

Food and Supply Related

  • Injuries or damages to others caused by the products you sell, such as if a patron has an allergic reaction.
  • Increased insurance limits to cover seasonal variations in supplies and inventory
  • Loss of perishable stock if it was spoiled as a result of direct damage caused by mechanical breakdown of your refrigerating or freezing equipment or interruption of electrical power to your location
  • Coverage to protect your business if one of your suppliers should be unable to provide what you need due to a covered loss

Equipment and Premise Related

  • Equipment breakdown, from freezers and stoves to air conditioning and phone systems, including the cost to repair or replace equipment lost or damaged by mechanical breakdown or artificially generated electrical current
  • Loss or damage to covered property caused by backed-up drains or sewers
  • Loss or damage to property signage or glass as a result of vandalism or other covered causes
  • Lost income due to interruption in power, water or communications caused by a covered loss at the supplier's property (also known as dependent property coverage)
  • Lost key consequential loss, including the replacement of locks if keys are lost or stolen
  • Valet parking and garage keepers' coverage for liability and property damage to your patrons' cars

Financial and Electronic Related

  • Extended business income to help your business recover from a covered property loss that forces your business to temporarily close, allowing you to receive income during your initial 90 days after reopening as you regain lost business
  • Loss of cash as a result of a robbery or holdup at your establishment or while an employee was in transit to or from an off-premise location
  • Employee dishonesty or crime coverage for dishonest or fraudulent acts of your employees, directors or officers
  • Income coverage for accounts receivable due to your inability to collect funds as a result of the loss of your account records from any covered property loss
  • Damage or loss to your computers or point-of-sale systems as a result of covered damage, power failures or computer viruses

Contact Business Insurance Now for a Free Risk Assessment

Because every food service business is unique, many restaurant owners and caterers need help selecting the right general liability and property policies and the proper coverage levels to address all of their business risks. Contact the restaurant insurance experts at Business Insurance Now for a free risk assessment to help you select the right coverage for your business.

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General Liability and Property Insurance Tips

  • Ensure that the kitchen is properly cleaned and maintained to minimize the risk of grease fires.
  • Serving alcohol places your business at risk for liability lawsuits. If you serve alcohol or allow customers to "bring their own bottles," you also need liquor liability insurance.
  • Be sure that your property insurance policy insures your belongings for full replacement value, so you won't have to worry about any depreciation of assets.
  • As with all kinds of insurance policies, provisions will vary from policy to policy and carrier to carrier. Carefully read your policy and familiarize yourself with what it covers. If you're not sure your coverage is adequate or the right fit for your risks, contact Business Insurance Now for a free policy review by our food service insurance experts.