Restaurant Insurance: What You Need, Best Companies
Restaurants need general liability insurance, liquor liability insurance and workers’ comp to comply with leases and local laws.
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To protect your restaurant or food business from lawsuits and other losses, you’ll likely need multiple types of business insurance. That usually includes:
- General liability insurance. This covers your legal costs if a customer or client sues you after getting hurt or sick at your restaurant.
- Commercial property insurance. This helps you repair or replace damaged property after a theft or natural disaster. Most policies let you tack on coverage for spoiled food too.
- Liquor liability insurance. If you sell alcohol, this is a must. It protects you if an intoxicated patron does something that results in a legal claim.
- Workers’ compensation. Most states require workers’ comp if you have one or more employees.
Most restaurants should start with a business owner’s policy, which includes the first two types of insurance. Here are our recommendations for the best BOPs.
Here’s how to find the best small-business insurance for your restaurant.
Save up to 30% on business insurance
NerdWallet Small Business helps you get real-time quotes from 30+ insurers, and instant access to your Certificate of Insurance (COI) through our partner, Coverdash.
Best insurance companies for restaurants
NerdWallet’s editorial team chooses the best business insurance companies based on many factors. For restaurants, we focused on insurers that:
- Receive relatively few general liability complaints and commercial property complaints to state insurance regulators based on their size.
- Are financially strong according to credit rating agencies, meaning they have the ability to pay claims.
- Sell liquor liability insurance.
- Make it easy to get a quote and buy a policy.
Here are our picks for the best restaurant insurance companies. We strongly recommend getting multiple quotes to find the best coverage at the best price.
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The Hartford
Best business owner's policy
The Hartford offers a BOP with many of the endorsements restaurants need. Those include coverage for data breaches, employment practices liability, spoilage and business income if food contamination forces you to close. The company earns high marks from Nerdwallet for strong financial strength ratings and relatively few customer complaints. Read NerdWallet's review of The Hartford business insurance.
Auto-Owners Insurance
Best for working with an agent
Auto-Owners sells all the coverage a typical small restaurant needs, including employee dishonesty insurance and food spoilage and contamination coverage. The company also offers discounts when you buy multiple policies or pay your annual premium upfront.
You’ll have to work with an agent to get a quote and buy coverage from Auto-Owners. You can find an independent agent on the company’s website. We haven’t written a review of Auto-Owners business insurance yet.
biBERK
Best for getting coverage fast
BiBERK is a Berkshire Hathaway company that sells insurance online. You can buy a BOP in a few minutes, with the option to add coverage for equipment breakdown, food spoilage, off-premises utility interruption and employment practices liability. But policies are only available in about 30 U.S. states (see a map here). Read NerdWallet’s review of biBERK business insurance.
What is restaurant insurance?
Business insurance helps protect your restaurant from lawsuits, building damage, an on-the-job employee injury or forced temporary closures.
Restaurant insurance protects you financially in cases like:
- Disasters, accidents or weather events that damage business property.
- Customer illness or accidents, like the classic slip-and-fall lawsuit.
- Claims of copyright or trademark infringement.
- Data breaches.
- Employee illness or injury while on the job.
- Loss of income after shutting down to repair property damage.
- Breakdown of expensive equipment.
What kind of insurance does your restaurant need?
All restaurants should have general liability insurance and commercial property insurance — or a business owner’s policy, which includes both. Almost all need workers’ comp as well. And if you sell alcohol, add liquor liability insurance to that list.
General liability insurance for restaurants
We recommend that every business have general liability insurance. It covers legal claims made by customers or other third parties, not your employees. These include claims like:
- Bodily injury. If a customer trips on an uneven threshold and breaks their wrist, they could sue you to cover their medical bills.
- Property damage. If a server spills a glass of wine on a customer’s pricey white coat, they could file a claim to recoup damages.
- Personal and advertising injury. If your manager makes a social media post about a competitor and the other business thinks it’s defamatory, they could file a legal claim.
All these types of claims fall under the same aggregate policy limit. If that’s $2 million, for instance, then a bodily injury claim and an advertising injury claim would both count toward it.
Product liability insurance for restaurants
General liability policies also cover some product liability claims. These include bodily injuries caused by a completed product that you sold — for instance, if a customer has an allergic reaction while eating takeout from your restaurant.
Product liability insurance usually has its own limit, separate from your general liability policy’s overall limit. Check a policy to see how much that limit is.
If you think you need more coverage, talk to your insurer about raising your limit or buy a separate product liability insurance policy. Umbrella insurance would also cover claims above your policy limits.
Commercial property insurance for restaurants
Commercial property insurance protects your building and the things inside it. That includes your raw ingredients, kitchen equipment, furniture, any art you display, and more.
Property insurance only covers damage from specific events. These usually include:
- Fires.
- Lightning strikes.
- Windstorms.
- Hail.
- Vandalism.
- Explosions.
- Falling objects.
Business property insurance usually does not cover flood and earthquake damage. Talk to an insurance agent if your business operates in a place where those are significant risks.
Important property insurance endorsements for restaurants
Make sure your BOP or property insurance policy has these types of coverage. Policies don’t automatically include them, so it’s important to double-check:
- Equipment breakdown coverage. If a piece of equipment unexpectedly fails on its own, not because of a fire or natural disaster, this policy can help you repair or replace it.
- Spoilage coverage. If food or ingredients go bad due to a covered loss, like a power outage, this insurance will help you replace them.
- Off-premises utility service interruption coverage. If your gas company has to repair a line that services your restaurant and you don’t have heat for two days, this coverage can make up for the income you lost during that time.
- Signs and outdoor property. If a windstorm blows away some of your patio furniture, this insurance can help you replace it.
Actual cash value vs. replacement value
Your insurance provider can determine how much your business personal property is worth via two methods:
- Actual cash value. This is how much your property is worth today, in used condition.
- Replacement value. This is how much it would cost to replace your property with something of similar kind and quality.
Think about your oven range. A new version of the same unit is almost definitely worth more than your current one. For that reason, replacement cost coverage will generally pay out more than actual cash value coverage. It’s also more expensive.
We don’t have a hard-and-fast rule about whether you should get actual cash value or replacement value coverage. Instead, weigh the difference in premiums against how much you’d want to get back if you had to file a property insurance claim.
Consider your equipment’s age too. If your range is brand new, for instance, it likely hasn’t depreciated enough to pay more for replacement value.
Liquor liability insurance
If you serve alcohol as part of your daily operations, you should have liquor liability insurance. General liability insurance usually excludes alcohol-related claims. So liquor liability coverage protects your business if someone accuses your team of serving alcohol to a patron who later caused harm.
Beyond that, some states require proof of liquor liability insurance before you can get a liquor license.
🤓 Nerdy Tip
Some liquor liability insurance policies exclude claims of assault and battery. Double-check yours or talk to an insurance agent to make sure you’re protected in case your patrons get into a fight. Workers’ comp insurance
Workers’ compensation is a legal requirement for most businesses. If an employee gets hurt on the job, it pays for their medical costs and a portion of their usual wages while they aren’t able to work.
Workers’ comp is required even for part-time employees. Click here to see the details of what your state requires.
Additional insurance policies for restaurants
Consider these other types of business insurance for your restaurant, too.Most restaurants start with a business owner's policy. A BOP includes general liability insurance, commercial property insurance and business interruption insurance. You can add many of the following protections onto a BOP, or buy a separate policy if you need more coverage.
| Type of insurance | What it covers | Example claim | How to get it |
|---|---|---|---|
| Costs to defend or settle legal cases filed by former employees. | A former server files a lawsuit claiming they were harassed by their manager. | You may be able to add some EPLI coverage to your BOP. You can also buy a separate policy. | |
| Lost business income and operating expenses as the result of a disaster. | Hail damages your roof and you have to close until you can get it fixed, losing revenue you would have otherwise generated. | Business interruption insurance is almost always included in a BOP. | |
| Claims of physical injury or property damage as a result of a defective product. | You cater an event and a group of attendees get food poisoning. They file a legal claim. | A general liability insurance policy or BOP includes some coverage. If you need more, you can buy a separate policy. | |
| Financial losses caused by cyber incidents such as data breaches and theft, hacking and ransomware attacks. | A hack exposes your customers' credit card data and you have to notify them and investigate the breach. | You may be able to add some cyber coverage to your BOP. | |
| Employee dishonesty or commercial crime insurance | Financial losses that result from an employee stealing money or property. | You discover that a manager has been embezzling from your restaurant. | Usually sold as its own policy. |
» RELATED: Best restaurant equipment financing
What coverage do food trucks or pop-ups need?
Food trucks and pop-up restaurants almost certainly need commercial auto insurance on top of standard policies like general liability. Commercial auto protects the vehicle you use to do business. It’s very similar to personal car insurance — you’ll get coverage for medical bills, car repairs and liability claims.
If your business is on the go, you should also consider inland marine insurance. This covers your business property while it’s away from your business address. That includes the time you spend in transit, vending at a third-party location or storing equipment or prepared items offsite.
How much does restaurant insurance cost?
Full-service restaurants pay median premiums of:
- $4,000 per year for a BOP.
- $1,500 per year for liquor liability insurance.
- $1,600 per year for workers’ comp.
That’s according to data that Coverdash, an online insurance company, shared with NerdWallet in 2026.
Fast food and carryout restaurants pay $3,200 on average for a BOP, according to Coverdash.
Save up to 30% on business insurance
NerdWallet Small Business helps you get real-time quotes from 30+ insurers, and instant access to your Certificate of Insurance (COI) through our partner, Coverdash.
Your restaurant’s costs will vary depending on a variety of factors. These include:
- Estimated sales. Insurance companies use this to estimate how much business you do and, as a result, how much coverage you need. If you dramatically underestimate your sales and your insurance company audits your business, you may get hit with a surprise bill.
- Number of employees. Like sales, this is a measure of your business size. Insurers base workers’ comp premiums on how many employees you have and what they do. If you underestimate your payroll, again, an audit could lead to a bill for the difference.
- Equipment and ingredients. A sushi restaurant may pay more for insurance than a pizza place, since raw ingredients are more expensive and spoil faster.
- Value of your property. If you ordered custom furniture for your dining room and had a woodworker hand-build your bar, your property insurance premiums will reflect that.
- Mitigation efforts. You may get discounts on your insurance policy if you have security and fire suppression systems, or if you can verify that your team has undergone food safety or harassment training.
- Business location. Certain ZIP codes have higher crime rates than others, for instance.
- Policy limits. The higher your policy limits, the higher your premium costs tend to be.
- Previous claims. Insurance costs usually increase after you file a claim.
Get several quotes to get a sense of how much you’ll spend on insurance. Every insurer calculates premiums a little differently, so prices will vary. We always recommend shopping around to find the best coverage at the best price.
How to get insurance for your restaurant
Follow these steps to get the coverage you need.
- Start with a BOP. This covers general liability and commercial property insurance. Consider endorsements to protect against spoilage, equipment breakdown and employment practices liability.
- Identify any other policies you need. You probably have to have workers’ comp due to state laws, and you may need liquor liability insurance to comply with local regulations. Talk to your insurance agent or a trusted advisor about whether you need anything else.
- Decide how to shop. If you need to buy insurance fast, use an online business insurance brokerage to get multiple quotes at once. If you want to talk to someone in person — not only while you shop for coverage but if you have to file a claim in the future — look for an independent insurance agent.
- Get quotes. If you’re shopping for insurance yourself, make sure you get quotes from at least two different insurers. This helps make sure you’re getting a competitive price. An independent agent should do the same.
- Buy insurance. Choose the best option and make your first premium payment. You can usually pay for a year at a time or in installments. If you choose the latter, set up automatic payments so coverage won’t accidentally lapse.
- Download and save your certificate of insurance. Your certificate of insurance proves that you have coverage. Once you buy insurance, you can download this form and share it with anyone who asks for it, like a landlord or business partner.
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