How much does restaurant insurance cost?

If you own or operate a restaurant, your day-to-day responsibilities may oscillate between managerial tasks, reviewing inventory and overhead, and the general upkeep of your food-based establishment. While you may have a strong grasp on what it takes to run and market your restaurant successfully, various unforeseen factors can throw a wrench in your plans and derail any progress you’ve made toward becoming a top restaurant in your area.

One way to protect your restaurant from unexpected damages is by equipping yourself with restaurant insurance, which covers you in the event of lawsuits, injuries to personnel, and other potential liabilities. Here we look at the restaurant insurance landscape and the costs associated with the different policies and coverage options that can help protect your eatery.

What insurance coverages do I need for my restaurant?

Determining the specific insurance necessary for your restaurant requires a thorough review of the risks associated with running your operation and the specific types of coverages that can help mitigate those risks. Even though each restaurant is different, some policies apply to most, with the 2 most popular types of restaurant insurance policies being general liability insurance and commercial property insurance.

General Liability Insurance: A food liability policy helps protect your restaurant from lawsuits brought on by foodborne illnesses and accidents, food poisoning, as well as other legal fees resulting from customer slip-and-fall injuries, slander or libel accusations, and other damages you may be responsible for due to actions of your restaurant employees or your overall business operations. General liability also helps cover damages resulting in medical bills and medical expenses incurred by customers.

Commercial Property Insurance: The commercial property insurance policy helps protect your restaurant from damages or losses resulting from vandalism or theft and also helps cover your restaurant against physical damages to your property and equipment resulting from fires, floods, electrical issues, or storms.

For an overall discounted rate, many restaurant owners chose to bundle general liability insurance and commercial property insurance together in the form of a Business Owner’s Policy, or BOP. The cost of a Business Owner’s Policy is determined by the value of the property covered, the restaurant's location, the equipment used by the restaurant, and a variety of other factors.

How much will my restaurant insurance cost per year?

The nature of your restaurant, what you serve, where you serve, your type of clientele, and the size of your business will typically impact how much you will pay for restaurant insurance.

Asking yourself, “How much does insurance for a restaurant cost?” is the first step to figuring out the types of insurance that might apply to your specific restaurant’s needs.

The average restaurant insurance cost, therefore, varies widely. For most restaurants, paying around $4,000 annually is customary for the combination of a Business Owner’s Policy, workers’ compensation insurance, and liquor liability insurance.

There’s also a wide range in price for each specific policy available to you, so the total cost of your restaurant insurance is highly dependent on your coverage needs and the corresponding policies you choose.

The average general liability insurance costs around $900 per year—$80 per month—ranging between $500 and $2,500 annually.

The average commercial property liability insurance costs around $740 per year and around $60 per month, ranging between $500 and $2,500 annually.

Below are 2 other popular restaurant insurance policies—and their related costs—that might apply to your business.

• Workers’ Compensation Insurance: Workers’ compensation insurance provides employees injured at work with essential coverage. The cost of the policy fluctuates based on the number of employees, the restaurant’s location, and the type of restaurant you operate. Policies range in price from anywhere between $600 and $10,000 annually, with an average cost of $1,500 per year or $150 per month. If your restaurant has a history of employee injuries, your prices may be higher.
• Liquor Liability Insurance: Liquor liability insurance is usually required if your restaurant sells alcohol as part of its operation. The policy will protect you if you serve intoxicated patrons who end up harming themselves or someone else or causing property damage. The average liquor liability insurance cost is around $600 annually—$50 per month—with most liquor liability policies ranging from $300 to $3,000 annually.

In addition to workers’ comp insurance and liquor liability insurance, certain restaurants may benefit from expanded coverage if part of their business involves the transportation of food or food-related goods or the use and upkeep of various food-related equipment and machinery.

• Commercial Auto Insurance: Commercial auto insurance will protect you from damages arising from vehicle-related mishaps such as car accidents and bodily injuries resulting from collisions.
• Equipment Breakdown Insurance: If the equipment you use to handle your food-related restaurant work stops working, equipment breakdown insurance will have you covered. Equipment breakdown policies cover everything from the replacement costs of fryers and refrigerators to malfunctioning computers. Electrical and non-electrical equipment are covered by equipment breakdown insurance as long as the gear is used as part of your restaurant’s food-related business activities.
• Spoilage Insurance: Spoilage insurance covers your restaurant in the event of any utility service malfunctions that cause you to experience any inventory damages or losses.
• Business Interruption Insurance: In the event of unforeseen circumstances that render your restaurant unworkable, business interruption insurance will help you maintain a “business income” to mitigate the hit to your bottom line.

If your restaurant could benefit from policies like equipment breakdown insurance, liquor liability insurance, or commercial auto insurance, you should add a restaurant endorsement to your general liability coverage. Doing so creates a robust Business Owner’s Policy, which will lower the cumulative cost of your small business insurance.

What kind of insurance do I need to open a restaurant?

Depending on the type of restaurant you’re opening, different types of insurance are more applicable to your operation than others. The needs and requirements of a bakery might differ from a California sushi joint, which might differ from a food truck, which might differ from a fast-food establishment.

Once you understand which sector of the restaurant industry your eatery fits into, you’ll be able to research your competitors and see the types of insurance they use to protect their businesses. Arming yourself with the knowledge of the specific policies being used by your competition will help you better understand your industry and help you make more informed decisions as to which insurance coverages are most applicable to your specific restaurant. A reputable insurance agency or insurance agent can help you determine the types of insurance that best fit your business.

How much is insurance for a bar?

One of the most popular restaurants in existence is the bar. Whether you run a tavern, saloon, or nightclub, being recognized as an establishment that predominantly serves alcohol comes with additional risks outside those typically associated with a basic restaurant. The increase in risk also comes with increased costs, such as purchasing a liquor license. There may also be an increase in restaurant liability insurance cost, insurance premiums, and an increase in deductibles, so prepare to spend more money on bar insurance than you would spend on insurance for other establishments, like cafes.

Since bundling liquor liability insurance, workers’ compensation insurance, and a Business Owner’s Policy costs—on average—around $4,000, the cost for insuring a bar will land in that general vicinity. The price will be slightly higher or lower depending on any additional policies you choose to purchase. At a minimum, you’ll want to secure a general liability insurance policy, commercial insurance policy, liquor liability insurance policy, and workers’ compensation insurance policy.

What are some restaurant insurance companies?

When choosing your restaurant insurance, you have many insurance companies and insurance carriers to choose from. However, not all insurance providers are equal. Some will knowingly juice up your insurance quote, while others will fail to deliver quality policies that protect you in the areas of your business you’re looking to insure. For a company that provides top-of-the-line policies at affordable prices, check out Huckleberry for all of your restaurant insurance needs.

Saving money on restaurant business insurance with Huckleberry

Huckleberry makes it incredibly easy for you to find the specific restaurant insurance policies you need for your food-based venture and can also provide you with a restaurant insurance quote in less time than it takes to chop a salad.

By combining multiple policies under one Business Owner’s Policy, you’ll be saving time and money after your first click.

With Huckleberry, you can rest easy knowing your restaurant operation is covered for all of life’s unforeseen circumstances, giving you peace of mind to focus on growing your eatery and delivering a world-class experience to your customers.