Running a restaurant means managing risks that most businesses never face — from grease fires to foodborne illness lawsuits. Here's the coverage stack every restaurant owner should have.
Every restaurant needs general liability insurance. It covers the most common restaurant claims: a customer slips on a wet floor, a server spills hot coffee on a patron, a delivery person trips on your front steps. These incidents happen regularly, and without GL, you're paying legal defense and settlements out of pocket.
For restaurants, GL limits should typically be at least $1M per occurrence / $2M aggregate. If you're in a high-traffic location or serve alcohol, consider higher limits.
Your kitchen equipment alone — ovens, refrigerators, fryers, dishwashers — can represent $50,000–$200,000 in assets. Add furniture, fixtures, signage, and inventory, and you're looking at significant property exposure.
A Business Owner's Policy (BOP) bundles GL with commercial property and business interruption coverage. The business interruption component is critical for restaurants: if a fire forces you to close for three months, it covers the income you lose during the shutdown. For most restaurant owners, a BOP is the most cost-effective starting point.
If your restaurant serves beer, wine, or spirits, you need liquor liability insurance. Standard GL policies exclude alcohol-related claims. If an intoxicated patron leaves your restaurant and causes a car accident, you can be held liable under dram shop laws in most states.
Liquor liability covers legal defense, settlements, and judgments arising from alcohol service. The cost varies by state and sales volume, but it's typically $500–$2,500 per year — a fraction of what a single lawsuit would cost.
Restaurants have one of the highest workplace injury rates of any industry. Burns, cuts, slips, and repetitive strain injuries are daily hazards. If you have employees — and almost every restaurant does — workers' comp is legally required in most states.
Kitchen staff, servers, dishwashers, and delivery drivers all face distinct risks. Your workers' comp premium is based on payroll and job classifications, so accurate reporting matters. Misclassifying employees can result in audits and premium adjustments.
A foodborne illness outbreak can destroy a restaurant's reputation overnight. Product liability insurance covers claims arising from food you serve — whether it's contaminated ingredients, allergic reactions, or foreign objects in a dish.
Some BOP policies include limited product liability coverage, but restaurants with significant food service volume should verify their limits are adequate. A single norovirus outbreak affecting multiple customers can generate claims well into six figures.
The typical restaurant insurance stack looks like this: BOP (GL + property + business interruption), workers' comp, liquor liability (if applicable), and an umbrella policy for additional limits. Depending on your operation, you may also need commercial auto (for delivery vehicles) and cyber liability (if you process credit cards or use a POS system).
An independent agency can build this package across multiple carriers to optimize coverage and cost — rather than forcing everything into a single carrier's product.
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