Compare cheap restaurant insurance quotes for free.

What is restaurant insurance?

Restaurant insurance is a set of policies designed with restaurants in mind. Like other businesses in the food industry, restaurants face their own unique challenges – numerous challenges at that. You have to think about the restaurant itself, your equipment, your employees, the customers, and of course, the food.

All of these could become involved in an incident. Your building and equipment could get damaged. Your food could cause an allergic reaction. Your restaurant could get vandalized and robbed. The list goes on.

Bottom line is – if you own a restaurant, you need insurance. There are some liability coverages, such as general liability, that are a must. You want to be protected from a potential slip-and-fall accident and every other third-party injury that could occur on your premises. If you serve alcohol, then you’ll also need liquor liability coverage. Neither of these are optional.

Yes, insurance itself is an expense, but it’s one you can at least anticipate. Plus, it’s likely to cost you less than a potential incident. A lot less.

What restaurant insurance includes

Typical restaurant insurance should at least include the following when it comes to coverage:

• Commercial general liability: This covers bodily injury and property damage claims that may arise from everyday operations. Slip-and-fall accidents are some of the most covered incidents under this coverage. In fact, it’s sometimes called ‘slip-and-fall insurance.’
• Commercial property: This coverage protects your building, equipment and inventory against damage or loss due to fire, theft or other covered perils. Think of it as home insurance for your business building.

Recommended add-ons for restaurant insurance coverage

If you’re not satisfied with your coverage, you can further enhance it with these add-ons:

• Business interruption: This helps cover lost income and operating expenses if your restaurant has to close temporarily due to a covered event. For example, if you have coverage for overland flooding, and a flood happens to result in temporary closure, then you will be reimbursed.
• Liquor liability: This one is crucial if your establishment serves alcohol, as it covers claims stemming from alcohol-related incidents. For instance, if a customer falls off a chair after ingesting several glasses of wine, they may blame your establishment for overserving them.
• Equipment breakdown: Covers the cost of repairing or replacing essential kitchen equipment if it fails unexpectedly.
• Product liability: This covers you in case a third party (e.g., customer) gets injured or has their property damaged because of your products. For example, a customer may allege that your meal has caused an allergic reaction. This coverage will pay the necessary medical fees.
• Cyber liability: If you collect customer data via take-out orders or online reservations, then this data can be stolen by hackers. This coverage will protect you against data breaches and cyber-attacks.

Common types of restaurant insurance claims

The types of claims filed by restaurants are numerous. But if we had to narrow them down, here are some of the most common examples:

• Slip-and-fall accidents: Wet floors, cluttered walkways, and uneven surfaces can lead to customer injuries, resulting in costly liability claims.
• Kitchen fires: Open flames and flammable materials make restaurants particularly susceptible to fires. This can cause serious damage, including injuries to your patrons.
• Foodborne illness: If proper food handling and storage procedures are not followed, your customers may get affected by foodborne illnesses, which in turn could lead to medical fees and legal expenses.

How much does restaurant insurance cost?

Each restaurant will have its own premium, based on the restaurant’s unique characteristics and circumstances. Factors like restaurant size, location and revenue can all play a role in determining your insurance costs. For example, if your restaurant is in an area where break-ins are common, then your premium may be higher.

Most restaurants pay about $1,000 to $5,000 a year. Given your unique circumstances, however, your premium may fall outside of this range.

Here are some of the factors that may influence your premium:

• Location: Restaurants in high-crime areas or regions prone to natural disasters may face higher premiums. The higher the risk of damage or loss, the more you have to pay.
• Size and revenue: Larger establishments or those with higher revenues often pay more for insurance, because there is more at stake.
• Claims history: A history of frequent claims can result in higher premiums. That’s because you are more likely to file more claims in the future than restaurants with a claims-free history.
• Type of cuisine: Certain cuisines that involve high-risk cooking methods (e.g., deep frying) may also impact your rates.
• Employee numbers: More employees can mean higher liability and workers' compensation costs.

If you want to know your exact premium, consider talking to a broker or pulling a quote from a comparison site like LowestRates.ca, which you can do for free in just a few minutes.

How to get the cheapest restaurant insurance rates

To get the cheapest insurance rates, you’ll need to think outside the box a little. Here are some ideas:

• Shop around: Compare quotes from multiple insurance providers. This will give you a better idea of the market rates and help you find the best deal. You can use comparison sites like LowestRates.ca or talk to a broker.
• Bundle policies: Combining multiple policies with the same provider can result in significant savings, since many providers offer discounts for this as a reward.
• Raise deductibles: While this means you'll pay more out-of-pocket in the event of a claim, it can significantly lower your annual premiums. Be sure to choose a deductible amount that you can comfortably afford in case of an emergency.

Restaurant insurance in Canada: What you need to know

Restaurant insurance requirements and regulations can vary by province in Canada. It's crucial to understand the specific insurance needs and legal requirements for your location. In general, you will always require workers’ compensation insurance, and in most provinces, commercial general liability as well.

In addition to mandatory coverages, Canadian restaurant owners should also consider regional risks. For example, restaurants in coastal areas might need flood insurance, while those in colder climates might benefit from coverage for snow and ice damage.