What Is Food Insurance And What Is The Average Cost?

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Owning a restaurant is a difficult but rewarding way to make money. When you are building your restaurant business, it is important to have the right insurance to protect your investment.

You can get food insurance by purchasing a business owner policy (BOP), which includes three important types at a lower cost than buying separately:

  • Property insurance
  • Business interruption insurance
  • Security issues

From there you can add on the regular details of your restaurant business.

Related: Best Insurance for Small Businesses

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What Does Restaurant Insurance Cover?

Comprehensive insurance is probably the most important form of food insurance. Because your customers are consuming food and drink, you run the risk of being sued if someone claims your food makes them sick.

Liability insurance also covers you if someone is injured in your restaurant, or if your business is responsible for damage to someone else’s property. A portion of the BOP loan may also provide you with money to pay for a judgment or court order, and you may be able to pay your attorney’s fees.

BOP also offers commercial property insurance. This covers damage to the dining room, if you have one, and other property, such as kitchen appliances.

Some types of coverage you may need for food insurance include:

  • Business interruption insurance. If your business is unable to open due to a problem covered by your policy (such as a fire), business interruption insurance can help you replace lost income with other expenses, such as relocation expenses.
  • Commercial insurance. Crime-related problems such as theft, robbery, fraud (including computer fraud), theft and employee dishonesty are often not covered by commercial property insurance. Commercial liability insurance covers these types of problems and can help your restaurant recover from the financial damage that occurs.
  • Additional insurance. They pay expenses, such as rent for temporary accommodation.
  • Accepting food contamination. If your restaurant is closed by the health board due to foodborne illness, this costs money in lost revenue, replacing contaminated food, blood tests and vaccinations for employees, cleaning equipment, and advertising to restore reputation. of your restaurant.
  • Food spoilage. It covers the cost of food lost in circumstances beyond your control, such as prolonged power outages or refrigeration equipment failure.
  • Liquor debt settlement. Alcoholic beverage insurance covers bodily injury or property damage caused by an intoxicated customer who has consumed alcohol at your business.
  • Machine breakdown. It covers the cost of repairing damage to everything from your boilers and pipes to electrical systems.
  • Workers’ compensation insurance. If an employee becomes ill or injured while performing work-related duties, workers’ compensation insurance helps cover expenses such as medical expenses, medical care, lost wages, disability and death. Most states require businesses to hire employees, even if you only have one employee.

What Types of Insurance Do Restaurants Need?

You may also need these types of insurance:

  • Commercial vehicle insurance. You need car insurance if you have a company car. It also includes liability coverage, which pays for property damage and injuries you accidentally cause to others. You can also get coverage for injuries to you and your passenger as well as coverage to repair or replace your company car if it’s damaged in a car accident or other problems, such as theft or bad weather.
  • Cyber ​​​​liability insurance. If your restaurant is the victim of a cyber attack, such as a data breach or cyber theft, cyber security insurance can help cover costs such as data recovery, investigative services, lost revenue and lawsuits due to privacy breaches.
  • Work related insurance. It protects your restaurant from employment-related issues, such as discrimination, harassment and wrongful termination. Work related insurance should not be confused with employment insurance.

How Much Does Restaurant Insurance Cost?

Expect to pay about $175 a month for a policy for business owners with $1 million in liability insurance, according to Insureon.

The cost of restaurant insurance varies based on a number of factors, including the type of property you own, where the restaurant is located, the amount of coverage you need and the value of your business.

Why Is Food Insurance Important?

If you own a restaurant, chances are good that it is a major source of income in your life. Imagine an event that led to the restaurant’s sudden closure or lawsuit: Can you survive financially? If so, how long?

With the right business insurance, you can recover money in the event of a disaster, such as a fire that destroys your business.

In addition, restaurant insurance provides financial support to protect your business in the event that someone sues you.