Owning and running a restaurant is a challenging task. Most restaurant owners have to juggle many responsibilities and different tasks while ensuring that customers are satisfied and happy. They also must ensure that they get positive feedback online. Although the reputation of a restaurant is a valuable asset, physical assets are also important.
The employee, building, and anything physical that is required to operate your establishment are important. That’s why you need restaurant insurance. Every restaurant faces numerous risks that can potentially shut it down. As such, it’s important to ensure that your investment has optimal protection by having the right insurance. Here are some of the major risks that have the potential to shut down your business.
1. Fire
Fire is a significant risk for all businesses. However, it’s particularly a major risk for restaurants because it’s constantly used in these establishments. Fire damage can be defined as the physical damage caused to a property through burning. The damage can be caused by flames, smoke, or corrosive substances that fire emits. It’s important for a restaurant, therefore, to get an insurance cover against fire damage.
A grease fire is the most common type of risk in restaurants. Deep flyers and electrical appliances can also cause a fire in restaurants if used incorrectly or not maintained properly. As such, it’s important to ensure that all possible causes of fire in a restaurant are monitored closely and regularly.
2. Employee Injuries
Employees are important assets of a restaurant. Most restaurants have employees that handle different responsibilities. Unfortunately, these employees face risks that can potentially shut down a restaurant. For instance, restaurant employees are required to lift or balance heavy containers or trays. They also reach across tables when serving food or clearing them.
Restaurant employees can also sustain scald injuries or burns from dishwashers, stove, deep flyers and other appliances. Some are exposed to toxins or hazardous chemicals and fumes. In some cases, employees can sustain injuries as they deliver food products.
Unfortunately, when an employee sustains any of these injuries within the premises of a restaurant, they can file a claim against their employer. That means your restaurant can suffer losses in compensation if it doesn’t have worker’s compensation insurance. Payment for damages can amount to thousands of dollars that can lead to the eventual shutdown of your establishment.
3. Property Damage
Several reasons can lead to the damage of your restaurant property. This property can include equipment, TVs, POS system, sound systems, and the content in the restaurant building. The building itself can also suffer exterior damage, roof damage, foundation damage, and so on. Property damage is defined as the destruction of private or public property caused by natural phenomena or a person that is not the owner. If this damage occurs extensively, a restaurant can shut down completely if it is not insured against it.
4. Liquor Liability
If a restaurant serves alcohol to increase revenue, it faces the risk of being held liable if a person is injured, gets into an accident, or injures other people under the influence of the served alcohol. If you don’t have restaurant insurance that covers liquor liability and you are sued, you might get out of business. That’s because your restaurant might be required to pay thousands of dollars in damages.
5. Food Contamination
Your restaurant faces the risk of potential food contamination. If a customer or employee consumes food in your restaurant and it then emerges that it was contaminated, your establishment can be held accountable.
6. Food Spoilage
The food items in your restaurant freezer are your business assets. However, something can happen and cause their spoilage. For instance, equipment failure or power outage can lead to their spoilage. That means your restaurant can lose a significant amount of money if it doesn’t have the right insurance protection.
7. Vandalism
Your restaurant could be situated at a location that is considered a safe neighborhood. However, this doesn’t mean it can’t be vandalized. Malicious people can spray paint on your restaurant building. Thieves can break into your restaurant premises and leave behind trails of damage. Your business can even be set on fire.
How to Protect Your Investment with Restaurant Insurance
To mitigate risks that can potentially shut down your restaurant, you need the right insurance. There are several options to consider when it comes to insurance for restaurants.
Common coverage options for restaurants include:
- Commercial property insurance
- General liability insurance
- Business owners policy
- Commercial auto insurance
- Workers compensation
Talk to your insurer about these options to choose a coverage that provides maximum protection to your restaurant.
