How to Customize Restaurant Insurance
Restaurant insurance is a specialized policy that protects food service establishments from various business risks. This protection usually includes several types of coverage, such as general liability and worker’s compensation, to address the challenges restaurants face. Insurance can protect against financial loss caused by property damage, food spoilage, or dram shop laws. Here are ways you can customize restaurant insurance coverage:
Business Interruption Adjustments
Business interruption insurance policies should cover your restaurant’s financial needs in case of potential closures caused by severe weather or natural disasters. Coverage limits are often determined by your establishment’s average monthly revenue and fixed costs, including employee wages and utility bills. Coverage extensions for utility interruptions or civil authority closures may be available.
Liquor Liability Additions
The amount and type of alcohol sales will determine the amount of liquor liability coverage your restaurant needs. Casual dining venues usually do not need coverage limits as high as establishments that serve premium spirits and extensive wine selections. When determining a good coverage limit, review your restaurant’s alcohol-to-food sales ratio. Alcohol-serving training programs for staff and implemented safety protocols may help reduce premiums while keeping the protection comprehensive.
Food Spoilage Plans
Restaurant insurance coverage for food spoilage should be based on the true value of your perishable inventory and possible loss scenarios. High coverage limits protect restaurants with expensive ingredients or large storage capacity against equipment failures. When planning for food spoilage coverage, determine whether inventory levels fluctuate during special events or peak seasons. Coverage should also include the replacement cost of food items and profit loss.
Equipment Breakdown Options
Equipment breakdowns can delay or shut down your restaurant operations. Key systems, such as refrigerators, ovens, grills, or mixers, should be included in restaurant equipment breakdown coverage. Account for replacement costs and repair timelines of specialized equipment when determining coverage limits. Both direct damage to equipment and consequential losses from operational disruptions should be included in the policy. Many restaurants also obtain coverage for technology systems that handle orders and payments.
General Liability Limit Structures
Your restaurant’s exposure to risks based on operations and location can dictate general liability coverage. When structuring liability limits, think about delivery services, catering operations, and special events. The policy should be comprehensive, protecting against on-premises incidents and off-site activities. Reviewing your restaurant’s lease requirements and client contracts can also help you determine coverage limits.
Worker’s Compensation Programs
Your restaurant should have workers’ compensation coverage structured to protect employees at all levels. Implementing safety programs and training protocols may help reduce premiums while maintaining comprehensive coverage. Specific risks associated with different positions, such as kitchen staff or servers, should be accounted for in the policy. When customizing coverage, restaurant owners should review their experience modification rate and claims history, which can affect premiums.
Get Restaurant Insurance
To customize restaurant insurance, restaurant owners should account for the coverage features that can be included in a restaurant insurance policy. The components can be tailored to your establishment’s operational needs and risk exposure. Regularly reviewing and updating your coverage verifies it evolves to meet the changing business needs. Contact a restaurant insurance provider today to customize your policy.
