Two young male and female business partners having a meeting in a restaurant. Discussing and planning insurance needs.

What Insurance Do Restaurants Need?

Are you the proud owner of one of Canada’s 59,000 restaurants?

If so, you’re part of the nation’s fourth-largest private-sector employers. No doubt you take great care in providing stellar customer service, a warm ambience, and delicious offerings to your customers.

When it comes to buying restaurant insurance, though, things can get confusing. What insurance do restaurants need? Are there different types of insurance for restaurants? How can you find the best business insurance for restaurants?

We know you have a lot on your plate, so we’ll make this as simple as possible. Keep reading below to learn what you need to protect your food and beverage business.

Restaurant Insurance 101

First of all, do you only need to worry about insurance if you operate a full-service dining establishment?

The answer is no! No matter the setting, size, or offerings, every food service venue has inherent risks. These include:

  • Full-service restaurants
  • Quick-service restaurants
  • Cafes
  • Coffee shops
  • Ice cream shops
  • Bakeries
  • Pizza shops
  • Fine dining facilities
  • Catering companies
  • Cafeterias
  • Food trucks

A customer could get sick after eating your food, or they could trip and fall in the parking lot. A fire could break out in your kitchen, or you could fall victim to theft, vandalism, or another disaster. This is true whether you operate a tiny food truck, an enormous cafeteria, or anything in between.

Every restaurant is vulnerable to incidents like these and you are liable for them, even if you’re not directly to blame. Without the right insurance plan in place, one unforeseen incident or lawsuit could cost much more than you think.

In the wake of the pandemic, the restaurant industry has seen some major changes — including rate increases for insurance. The good news is that an experienced insurance broker can help you find the coverage you need at a price you can afford.

What Insurance Do Restaurants Need?

With that overview in mind, let’s talk about the different types of insurance for restaurants. Here are six types of coverage your establishment should consider.

1. General Liability Insurance

This insurance can be required by law for virtually every type of company, including restaurants.

It protects your business in the event that someone gets sick or injured on your business premises. It can also cover scenarios like reputation damage, copyright infringement, and medical costs from foodborne illnesses. 

2. Workers’ Compensation Insurance

Another popular type of insurance for restaurants is workers’ compensation (or workers’ comp).

This protects your employees against lost wages and other costs associated with on-the-job accidents and injuries. It also covers any legal costs associated with an employee lawsuit.

3. Property Insurance

If you lease your restaurant venue, the building owner likely carries this type of insurance in case there’s any damage to the physical property. However, their policy would not extend to the contents that belong to your business, such as the furnishings and kitchen equipment.

This is why it’s very important for restaurant owners to carry their own property insurance policy.  Your policy should encompass the entire replacement cost of all of your owned items.

4. Food Contamination Insurance

What would you do if a power outage or another disaster resulted in contaminated or spoiled food?

This coverage is designed to help you recoup the costs of food loss in such an event. It’s also sometimes called product liability, which can cover you for illness, dental damage, etc.

5. Liquor Liability Insurance

If you sell alcoholic beverages, your establishment carries an additional layer of risks. This insurance protects your business against liabilities and costs if an intoxicated customer injures themselves (or someone else), commits a crime, or damages property.

6. Auto Liability Insurance

If your company owns delivery vehicles or you regularly transport food to catering events, you’ll need auto liability insurance. This protects you against any legal, medical, or repair costs that result from a traffic accident.

Understanding Restaurant Insurance Cost

The list above might make you feel anxious. What is all this coverage going to cost you? Can you afford it at this stage of your business development?

The good news is that there’s no “single” type of coverage that suits every restaurant. Rather, you can get a customized insurance quote and decide whether to select or opt out of certain types of coverage.

To get the most accurate quote, you’ll need to know:

  • The square footage of your property
  • The age and type of building
  • The type and value of your equipment, technologies, and other inventory
  • The type of security system and fire system on the property
  • The number of customers and employees
  • Your projected sales figures

The ultimate cost of your restaurant insurance will depend on these factors and others, including your location, risk exposure, and deductible amount. 

It also depends on the type of restaurant you run. For example, a quick-service restaurant that offers delivery (but not alcoholic beverages) has a different set of needs than a wine bar next door. Your insurance broker will take the time to examine the ins and out of your restaurant and help you determine the best types of coverage.

The Best Business Insurance for Restaurants

So then, what’s the takeaway? What insurance do restaurants need to ensure they’re protected legally?

The types of insurance we discussed above are highly recommended or may be required by law. However, there could be other types of coverage that could benefit your business that we didn’t have time to discuss today.

Just like every food business is unique, every restaurant insurance policy is unique. James Inwood has more than 10 years of experience putting together custom quotes for food and beverage professionals like yourself. We can even provide same-day quotes, meaning you don’t have to sit around for days or weeks waiting for a response.

Are you ready to take the next step and chat about your business needs? Request a quote today or email us at:

We’re also happy to take your call or respond to a WhatsApp message. Our direct number is 647-966-7093. We’ll speak with you soon!

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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