Operating a restaurant means more than just creating tasty dishes. It also means protecting your investment against certain risks. Restaurants have a high failure rate with around 60 percent of new restaurants failing within one year. Oftentimes, business owners are forced to close due to circumstances out of their control, such as equipment breakdown, employee injuries or food-related incidents. While you cannot always prevent these types of situations from occurring, you can help protect yourself from financial ruin with the right insurance policies. Restaurant insurance can aid restaurants in staying open, and running smoothly.
What kind of insurance does a restaurant need exactly? This can range from venue to venue. Here are a few things you should consider when choosing insurance policies for your restaurant.
Find the Best Rate for Your Restaurant’s Size and Needs
The key to getting the best rate for your restaurant is to acquire coverage that does not fall below or exceed your needs. Take the size of your restaurant into consideration when choosing a policy. Insurance prices can range based on the amount of coverage you need. If you have a small coffee shop, you are likely not going to need the same amount of coverage as a large fine dining establishment.
Protect the Heart of the Matter with Equipment Coverage
Your restaurant equipment is your livelihood. Without it, you would not be able to cook your menu items or serve customers efficiently. Due to the importance of your commercial equipment, it is essential to acquire equipment insurance coverage. Most equipment breakdown insurance policies cover machinery like ovens, boilers, steamers, refrigerators, freezers, food warmers and ice makers.
Even if your equipment is new, a policy could come in handy. Even new equipment could become damaged by electrical malfunctions, steam explosions and similar incidents. With equipment coverage, the cost to repair or replace your restaurant equipment will be partially or fully covered, depending on your policy’s terms.
Keep Your Employees Happy with Comprehensive Coverage
In addition to keeping your restaurant protected, you also want to consider the well-being of your employees. There are several types of policies that are essential if you have any number of employees working for you. First, obtain a workers’ compensation policy. This will provide protection in the event that an employee becomes ill or injured at work.
Next, consider paying for unemployment insurance. In many states, unemployment insurance is a requirement if you have at least one employee who has worked a minimum of one day per week for 20 weeks or is paid at least $1,500 in wages in any quarter of the calendar year. Other policies designed for the health and well-being of employees include disability insurance and employment practices liability insurance.
Get Covered for Damages and Liability in Case of Food-Related Incidents
As a restaurant, working with food is your entire business. While you may have strict regulations in place that help prevent food-related incidents from occurring, the truth is that accidents can happen regardless. A general liability insurance policy can help cover a wide range of incidents, such as food poisoning.
Product liability insurance is also a must-have policy for restaurants. This coverage can be useful if someone becomes ill because of the food you served. For example, if you served undercooked food that sends a customer to the hospital, any medical bills or other damages incurred may be covered by your product liability policy.
Don’t Overpay During Market Fluctuations
Market fluctuations can cause the price of common restaurant insurance policies to go up and down at various times throughout the year. If you do not check the market on a regular basis, you could later find out that you are overpaying for your insurance. Most insurance companies count on restaurant owners not reviewing the market, which could result in a substantial amount of wasted money.
Ideally, you want to check the insurance market at least every six months to determine if any market fluctuations have occurred that could affect how much you pay for insurance. You will also want to check the market approximately one month before you renew your policy. Also, look for ways to save in other ways, such as shopping around for insurance or bundling your insurance with the same company.
Get a Personal Quote for Restaurant Insurance
Many new business owners underestimate the importance of restaurant insurance policies until it is too late. Restaurant insurance can cover the costs associated with a wide range of liability claims and property damage. Without an insurance policy in place, you could find yourself having to pay these substantial costs out-of-pocket. This could ultimately force you to close down your establishment due to a depletion of funds. If you are ready to start shopping for restaurant insurance, JMG Insurance Agency can help. Contact an experienced insurance agent today for a personal quote.