How many times have you watched a movie where a character slips and falls in a restaurant? Chances are, it’s more than once. But what happens to the character and restaurant after they have injured themselves?
If you’re a restaurant owner, you probably already know what happens next. A lawsuit followed by payment for the client’s legal and medical expenses – even if you’re proven to not be at fault, it can be expensive to defend yourself. If you have restaurant insurance, this isn’t the end of the world, but if you don’t, it could mean the end of your business.
Restaurants are notorious for slip-and-fall injuries, but protecting your business goes beyond putting up a ‘wet floor’ sign and hoping for the best. Being aware of the risks you face as a restaurant owner, and being prepared for what happens after an incident occurs are all critical components of a robust risk management strategy.
Five Common Restaurant Insurance Claims
To make it easy to get started, we’ve listed five common restaurant insurance claim scenarios you could face as a restaurant owner, and what to do about them.
Claim 1: Slip-and-Fall
A study conducted by the Canadian Institute for Health Information in 2018 reported that 1,800 of emergency visits are due to slip-and-falls – a day. With an aging population, it is essential to protect yourself in the event it happens at your restaurant. Commercial General Liability (CGL) insurance is a basic form of coverage that covers the costs associated with claims alleging bodily injury or property damage due to your business operations. If you’re going to protect your business with any insurance, this should be the one you choose.
Claim 2: Property Damage
In insurance, anything can happen. Fire and water damage are two common loss exposures for restaurant owners, but you rarely consider the chance of the ceiling collapsing like it did in this Ottawa bakery. While the patrons were safe, there was minimal property damage. Commercial Property Insurance is a type of coverage that covers the costs associated with loss or damage to the physical assets of your business due to an insured peril, such as natural disasters, theft, and vandalism.
Claim 3: Food Poisoning
Say you have a customer who told their waiter they have celiac disease, and they end up having a severe reaction following a meal at your restaurant. If they can prove the food they ate at your restaurant made them ill, you may find yourself at the wrong end of a lawsuit. In the event your product (food) makes a patron sick, Product Liability Insurance could cover the legal and medical costs associated with claims alleging bodily injury due to your products.
Claim 4: Equipment Breakdown and Business Interruption
Without your kitchen equipment, you wouldn’t have much of a business, which is why Equipment Breakdown Coverage is an essential component of a comprehensive restaurant insurance policy package. Equipment breakdown insurance provides coverage for the cost to repair or replace equipment that has broken down due to an electrical or mechanical issue.
Should this breakdown cause you to close your restaurant temporarily, Business Interruption Insurance could cover the net income lost during this time, as well as employee wages and overhead costs.
Claim 5: Liquor Liability
The golden rule of serving liquor at your restaurant location: don’t serve your patrons to or past the point of intoxication. While never the intent, if an accident occurs, Liquor Liability Insurance provides coverage for bodily injury or property damage due to an intoxicated person(s) served at your restaurant. If you serve or plan to serve alcohol at your restaurant, this type of insurance is critical. Check out this article for more information about adding liquor liability coverage to your restaurant insurance.
What is Restaurant Insurance?
It may be overwhelming to think of all of the things that could go wrong as a restaurant owner, but with a strong risk management strategy and a comprehensive insurance package, you can keep the stress under control. Restaurant insurance is an insurance policy package specifically designed to protect restaurant owners from common risks, such as those listed in this article. We know your business is unique and requires unparalleled coverage. Speak to your broker about customizing your policy to meet your specific business needs.
How Much Does Restaurant Insurance Cost?
The cost of restaurant insurance varies from business to business based on several unique factors, such as location, annual and projected revenue, and your experience in the industry. For a basic commercial general liability policy, you can expect to spend around $650 a year for a $1M limit.
Running a restaurant is stressful, but your insurance doesn’t have to be.
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