How to Get Business Insurance for Restaurants and Food Companies

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1. Evaluate your risks
- Food spoilage and contamination.
- Grease fires.
- Customer intoxication (and any resulting actions).
- Broken or damaged equipment.
2. Determine your policy and coverage needs
Type of insurance | What it covers |
Claims against your business in cases of third-party bodily injury, property damage and personal and advertising injury. A customer getting sick from your food and suing you would be covered under general liability. | |
Commercial property insurance | Damage to your business property (building, assets, equipment) as the result of natural disasters, fire, smoke or vandalism. An electrical fire destroying your kitchen would be covered under commercial property insurance. |
Loss of income when your business is unable to operate due to a disaster. Business interruption insurance would cover your lost income if you had to close your restaurant to repair the kitchen due to the damage from an electrical fire. | |
Covers your employees if they are injured or get sick while at work. Most states require employers to have workers' comp for their employees. If an employee burns their arm in a kitchen accident, their medical expenses would be covered under workers' comp. | |
Covers any vehicles you use in the course of doing business. Protects you from accident-related expenses that arise from injuries or property damage. If your delivery driver is rear-ended at a stoplight on the way to drop off an order, commercial auto insurance would cover damage to the car and any injuries the driver receives. | |
Protects businesses that serve, sell or distribute alcohol. Covers claims of bodily injury or property damage that an intoxicated person causes after a business served them alcohol. If you serve a customer alcohol and they later start a fight and injure another customer, this type of insurance covers claims related to the incident. | |
Protects your business in the case of a data breach or software hack. If hackers breach your computer system and steal your customers’ credit card information, this type of policy would cover the costs of notifying your customers, setting up credit monitoring and investigating the attack. | |
Equipment breakdown insurance | Covers equipment breakdowns as a result of power surges, motor burnout, boiler malfunction and operator error. If an electrical issue causes your refrigerator fan to break and the appliance to stop working, this coverage can help cover the costs of purchasing a new one. |
Employee dishonesty coverage | Protects your business in the case that an employee steals money or property. Can be part of a larger commercial crime insurance policy. If you discover an employee has been stealing cash from the register, this insurance can help cover those losses. |
3. Choose how to shop
Contact providers directly
Good choice for you if:
- You already have a sense of the type of insurance your business needs.
- You want to get a quote and purchase a policy quickly.
- You don’t want to deal with a broker.
- You don’t have complex policy needs — e.g., you’re looking only to purchase a general liability policy or a BOP.
Possible downsides:
- It may be time-consuming to contact multiple providers for quotes, especially since not all providers offer the same types of business insurance and coverage.
- Although you can talk to a representative over the phone, you may not get the same level of assistance as you would working with a broker or independent agent.
Use an online marketplace
Good choice for you if:
- You want to manage the buying process on your own, but want to avoid the hassle of contacting multiple providers for quotes.
- You would like the option of talking to an expert to help you understand your insurance needs, walk you through the buying process or answer any questions you may have.
Possible downsides:
- Marketplaces partner with individual insurance providers, so you’ll receive quotes only from providers that the marketplace works with.
- Marketplaces don’t underwrite insurance policies themselves, and not all of these companies allow you to manage claims or post-purchase issues through their systems. You may find the communication between the different parties — you, the marketplace, the provider — isn’t always seamless.
Use a broker
Good choice for you if:
- You’re buying business insurance for the first time or are unsure of what types of coverage you need.
- You want to work directly with one person who can answer any questions you have, explain policy complexities and generally help you through the insurance buying process.
- You don’t want to spend time contacting providers yourself to get quotes.
Possible downsides:
- Because brokers work on commission, they might try to sell you additional policies or coverage that you don’t need. Make sure that any broker you work with is reputable, and is looking out for your interests first.
- Brokers are not obligated to find you the lowest rates for your policies.
- Some brokers charge an additional fee for their services.
- The process of shopping with a broker will likely be slower compared with using an online marketplace or contacting providers directly.
4. Compare providers
- Policy coverage: What exactly is covered under the policy? What isn’t covered? You’ll want to understand the policy details to make sure you’re getting the coverage your business needs.
- Limits of liability: How much of a loss will the insurance provider cover? For example, among Insureon customers, most food and beverage businesses choose general liability policies with a $1 million per-occurrence limit and a $2 million aggregate limit. Larger businesses or those at a higher risk level may need a higher limit.
- Price: How much will the policy cost? Is there a deductible on your policy — and if so, how much is it? When evaluating the costs of two different providers, you’ll want to try to make sure that the coverage and liability limits are the same so that it’s a more balanced comparison.
- Reviews: Check out the ratings and reviews of any insurance provider before purchasing a policy. You can see how many complaints have been filed against a company using the National Association of Insurance Commissioners website.