Every day, Canadians make 22 million visits to their favourite restaurants, bars, and cafes.
Is yours one of them?
As a restaurant owner, you take pride in offering delicious food, a warm ambience, and stellar service. No doubt you want to spend as little time as possible in the back office so you can be out front with your customers. You also want to ensure that everyone who visits your establishment has a safe, enjoyable experience.
This is where restaurant business insurance comes into play. You know it’s important, but you lack the time or desire to read the fine print. How much is restaurant insurance, and what type of coverage do you really need?
Keep reading for your guide to understanding restaurant liability insurance cost.
Do I Really Need Restaurant Business Insurance?
Let’s start with the most obvious question: Is restaurant insurance really necessary?
In a word, yes. Every small business — including your dining establishment — needs certain types of commercial insurance. This is true even if you just opened, if you only serve a few customers, or if you feel your business doesn’t carry any serious risks.
The truth is that every business comes with inherent risks, no matter the size or type.
A customer or employee could get injured on your premises. Your property could be damaged by a fire, flood, or vandalism. Even if you only operate a food truck or a catering business, you still run the risk of food contamination or a traffic accident.
General liability insurance does cover some of these scenarios, and it can be required by law for many types of business. However, restaurant insurance covers a wider range of liabilities, which we’ll get to in just a moment.
How Much Is Restaurant Insurance?
You’re reading this article because you want to know the average restaurant insurance cost.
We wish we could list a fixed price to make it simple, but the answer is: It depends. If you want to see a dollar amount, the average cost of business insurance for Canadian small businesses is anywhere between $500 and $5,000.
Why is there such a huge range?
Think about all the different types of businesses that fall under the category of “food and beverage.” A food truck will not have the same insurance needs as a restaurant that seats 200 customers. And a cafe that only serves soft drinks has different liability concerns than a brewery or a wine bar.
When you request a quote from an insurance broker, you will need to provide information such as:
- Square footage of your business
- Physical property characteristics
- Lease details
- Hours of operation
- Types of fire/security systems
- On-site activities and entertainment
- Whether you sell alcohol or only soft drinks
- Projected sales & number of customers
- Total value of inventory & business equipment
- Number of employees
Based on these details, you’ll receive a customized quote that provides the coverage you need to safely operate your business. At the same time, you won’t have to worry about paying for coverage you don’t need (i.e., liquor liability if you don’t sell alcohol).
What’s Included in Restaurant Insurance Coverage?
To be clear, “restaurant insurance” is not a single, all-inclusive policy. Rather, it’s a collection of policies that provide the specific types of coverage your business needs.
Let’s round out our discussion with an overview of the most common types of restaurant insurance coverage.
General Liability Insurance
This coverage was likely required when you purchased your property or signed the lease. It protects your business if there’s a lawsuit because someone gets injured on your premises. It also protects you if there’s an accident in the parking lot or a customer gets sick after eating your food.
Commercial Property Insurance
This policy covers damage to your physical restaurant space, as well as your furniture, equipment, signage, and inventory. This could come as a result of theft, vandalism, fire, or storms. If you live in an area that’s prone to a certain type of natural disaster (i.e., flooding, wildfires, or winter storms), you’ll want to make sure your policy provides coverage for those events.
Business Interruption Insurance
If something happens that forces you to temporarily shutter your doors, you’ll be glad you have business interruption coverage. This policy helps to pay for your operating expenses, loss of wages, and loss of income if you have to unexpectedly close for a time.
Business Owners Policy (BOP)
Much like buying a combo meal at a fast-food restaurant, this policy combines three important types of coverage for a discounted price. It includes general liability insurance, commercial property insurance, and business interruption insurance.
Liquor Liability Insurance
If someone becomes intoxicated at your restaurant and injures themselves or damages your property, liquor liability insurance will protect you in the event of a lawsuit. It also provides protection if that individual gets behind the wheel and is involved in a car accident on the way home.
Commercial Auto Insurance
Do you own a food truck, a catering business, or a food delivery vehicle? You’ll want to make sure you have a commercial auto insurance policy to protect you in case you’re involved in an accident on the road.
Restaurant Insurance Cost: Get Your Custom Quote
As we’ve discussed, there’s no one-size-fits-all answer to the question, “How much is restaurant insurance?”
Your restaurant insurance cost will depend on the type and size of your establishment, as well as your offerings and the number of employees on staff. One thing that is clear is that you need restaurant business insurance to protect your customers, your employees, and yourself.
James Inwood is here to take the mystery out of commercial insurance. We’re happy to offer expert advice, competitive pricing, and same-day restaurant insurance quotes.
Request your quote today or call our direct line at 647-966-7093 to learn more.
James Inwood is a member of Canadian Insurance Brokers Inc. CIBI operates across Canada with more than 40 licensed brokers and is completely independent so our advice is always objective. Representing 14 insurance carriers on the personal side and over 20 insurance providers on the commercial side helps give my clients clear choice and competitive pricing.