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Blog Articles: 5 Types of Insurance Your Restaurant Needs

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Some people are taking the entrepreneurship route to pursue a lifelong passion or interest, while others want to escape the monotony of an office job. Whatever the reason is, starting and running a business, like a restaurant, is both rewarding and challenging.

The Risks of Running a Restaurant

The idea of starting a new business is exciting, but it’s also essential to understand that there are potential risks involved. These include accidents, natural disasters, and other unfortunate incidents that can affect your day-to-day operations. Just one lawsuit from a customer or client can result in substantial financial losses.

These risks should not hold you back from your dream of becoming a business owner, but they are things you need to be aware of and prepared for. After all, you can do something to minimize the impact of these risks.

One thing you should prioritize is purchasing restaurant insurance. As someone who’s just starting in the industry and with limited funds, you may think that insurance may only add up on the list of expenses that you need to cover. But while the premiums are an extra cost, carrying restaurant insurance comes with a lot of benefits. For one thing, it will protect the business against financial losses due to claims associated with damage to property or bodily injury.

Types of Restaurant Insurance

There are different types of insurance available nowadays. A quick search online and you’ll find numerous insurance providers offering an array of policies that cater to the specific needs of a restaurant. It may be overwhelming to choose the right ones for your business. To make it easier, here are some types of insurance to consider.

General Liability Insurance

This coverage protects the company against legal costs and other fees that are associated with lawsuits due to an incident that led to bodily injuries or damage to property. Just imagine the financial loss that you will face if something happened to your customers or clients and you don’t carry this type of insurance.

Commercial Property Insurance

What if the physical business assets of the restaurant get damaged due to accidents such as fire and need some repair work or replacement? It could mean a significant amount of money. But with commercial property insurance, you don’t have to worry about spending a lot since it will cover the expenses associated with loss of, or damage to, property.

Workers Compensation Insurance

As the name suggests, this type of policy is designed with the employees in mind. If one of your staff members sustains injuries while at work, the insurance will cover the hospital fees and rehabilitation costs. Also, this insurance pays for lost salaries if the staff member needs some time off to recover.

Cyber Liability Insurance

Do you maintain a database of customer data? Do you have card transactions? You may want to purchase cyber liability insurance. Data breaches have become more prevalent as people opt for the digital route to manage their transactions. Keep your customers’ confidential information safe by carrying this coverage.

Crime Insurance

This coverage protects your business from different kinds of theft, including burglary, forgery of documents, and extortion. Unfortunately, restaurants are often a target for criminals, so you should definitely consider carrying this policy.

How to Choose Your Restaurant Insurance Policies

Aside from knowing the different types of restaurant insurance, compare the offerings of various insurance providers to help you make an informed decision on what coverage suits your business. Weigh the advantages and disadvantages of each product. Here are other tips when choosing restaurant insurance:

  • Identify potential risks. Companies tackle different factors that can affect day-to-day operations. Take a look at the various aspects of your restaurant and assess which are prone to specific vulnerabilities. Knowing the risks involved will significantly help in identifying the right insurance.
  • Read the fine print. There may be instances where we are all guilty of skipping the terms and conditions. In the world of insurance, this is a no-no. The fine print indicates essential details such as inclusions and exclusions of the policy. Make sure to read and understand everything to avoid any inconvenience later on.
  • It’s not always about the price. The cost of insurance should not be the sole deciding factor. As with any purchase, the least expensive option may not be able to meet your requirements. On the other hand, the most expensive insurance does not necessarily mean it’s the best choice.  

These are just some of the things restaurant owners need to know about insurance. It helps to seek professional guidance from a reputable insurance provider. They will be able to assess the risks and recommend the types of insurance that best suit your restaurant.

Written by Emily Lazration

2020-12-03 17:01:14