What Does Restaurant Insurance Cover?

Canada’s restaurant industry is booming, with restaurants and bars generating $79 billion each year.

If you’re reading this, chances are you’re the proud owner or manager of one of these restaurants. Your day-to-day is full of endless details, from boosting sales and reducing costs to finding (and retaining) the best employees.

Restaurant insurance, on the other hand? It might not be at the top of your list. In fact, it might not be on your list at all.

We understand how confusing it can be to know what type of coverage you need. And, of course, no one wants to pay for coverage that they don’t need.

What does restaurant insurance cover, and who needs it? How can you find the insurance policies you need at an affordable price? We’ll answer these important questions and much more, so continue reading below.

Who Needs Restaurant Insurance?

Let’s start with the most obvious question: Do all restaurants need restaurant insurance?

The short answer is: Yes, they do. This includes full-service establishments as well as:

  • Fast food restaurants
  • Cafes
  • Coffee shops
  • Ice cream parlours
  • Bakeries
  • Pizza shops
  • Cafeterias
  • Catering companies
  • Food trucks

In other words, if you sell food or beverages in any capacity, you need some form of food and beverage insurance.

Is General Liability Insurance Sufficient?

When you bought your building or signed the lease, you had to have at least general liability insurance. This basic insurance can be mandatory for all Canadian businesses, including restaurants.

As you probably already know, this general coverage protects your company in the event of a lawsuit. Most small business general liability insurance policies begin with at least $1 million in coverage, so you may think this is the only type of insurance you need.

Is this really the case?

Consider a few examples of real-life scenarios that could happen at any dining establishment:

  • An employee slips and falls and needs to have back surgery to address their injuries
  • A customer drinks too much alcohol at your bar and gets into an accident while driving home
  • A thief breaks in and vandalizes your dining room or steals equipment from your kitchen
  • A fire breaks out in your restaurant office and destroys all your electronics

Your general liability insurance policy will take care of all these things, right?

Wrong. In fact, it won’t cover any of these scenarios. This is why it’s so important to understand exactly which types of insurance policies your restaurant needs.

What Does Restaurant Insurance Cover?

There’s no one-size-fits-all restaurant insurance because every establishment has unique risks. Your insurance broker will consider your business operations and then recommend specific types of coverage based on your needs.

Here’s a brief overview of some of the most common types of restaurant insurance.

Business Property Insurance

If you lease your property, the owner will have their own property insurance to protect the physical building. However, you’ll need your own property insurance policy to cover everything inside, from the kitchen equipment to the furniture to the office equipment.

Worker’s Compensation

This coverage pays for medical costs and lost wages if one of your employees gets injured on the job. It also protects your business against a potential lawsuit from that employee.

Liquor Liability Insurance

If you serve alcoholic beverages in your establishment, there’s a whole extra layer of potential risks to consider. This coverage protects you in case of any property damage or bodily harm caused by an intoxicated customer.

Equipment Breakdown Insurance

What happens if your fryer catches on fire or your refrigeration unit leaks? This coverage pays to repair or replace the equipment you need to keep your restaurant operational.

Crime Insurance

A restaurant is a tempting target for criminals. They could break in and steal cash from the till, equipment from the kitchen, or electronics from the office. Depending on your restaurant’s location and hours of operation, crime insurance could give you extra peace of mind.

Food & Product Liability Insurance

No matter how careful you are, there’s always the potential for food poisoning, food spoilage, or allergic reactions. If one of your customers becomes ill after eating in your establishment, this coverage will protect you in the event of a lawsuit.

Automobile Liability Insurance

Do you own delivery vehicles for your restaurant? Or do you run a catering business that operates all over the city? Automobile liability insurance protects you against legal, medical, and repair costs in the event of a traffic accident.

These are just a few examples of the type of coverage your restaurant may need. Depending on your business operations, you might also consider:

  • Business interruption insurance
  • Cyber insurance
  • Inland marine insurance
  • Food contamination insurance
  • Employment practices liability
  • Umbrella coverage

Remember, you don’t have to figure all of this out on your own. An insurance broker can explain how business insurance works and recommend the best policies for your establishment.

Where Can I Find the Best Insurance Policies?

After our discussion, it’s clear that you need certain types of insurance to protect your restaurant.

What does restaurant insurance cover? Since no two dining establishments are exactly alike, it depends on the unique needs of your business.

This is where we come in. James Inwood has over a decade of experience finding the best insurance policies for restaurant owners just like you. We examine the specific risks and needs of your restaurant and then provide a custom quote with the coverage you need.

Best of all, we can provide a same-day insurance quote, meaning you won’t have to waste any time waiting to hear back from us. 

Don’t leave the fate of your restaurant to chance. Request your quote today or send an email at: jinwood@cibi.ca. 

Prefer to talk to a real human? We’re happy to do that too. Give our direct line a call (or message us on WhatsApp) at 647-966-7093.

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.

James Inwood, Insurance Broker
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