Have you ever thought about what would happen if you have a grease fire? If someone gets scalded from hot food? If you are in the food services industry, there many things that could shut down your business. So, to protect yourself, there are several base policies that you should consider. For starters, business property insurance can cover the physical building and everything inside. General Liability insurance provides coverage if your business is at fault for injuries to others and their property. Workers’ compensation insurance is required in nearly all states if you have employees. That said, restaurants – especially businesses serving alcohol, making deliveries, or offering valet parking – have unique risks. So whether you are a sit-down restaurant, take out or fast-casual, your business needs to be protected. We regularly work with foodservice companies to help insure them against the things that are most likely to happen, at a reasonable price.
What are the insurance policies we recommend for Restaurants and Food Service Comapnies?
Business Owner’s Policy (BOP)
Worker’s Compensation
General Liability
Commercial Auto
Property Insurance
Employment Practices Liability (EPLI)
Commercial Umbrella
Cyber Liability
*In addition to these policies, we also recommend Liquor Liability, Contamination Insurance, Spoilage Insurance, and Crime coverage. To learn more about these types of coverages, give our agency a call today.
Restaurant & Food Service Insurance FAQs
1. What types of insurance do restaurants and food businesses need?
At minimum: General Liability, Commercial Property, and Workers’ Compensation. But most food businesses also need:
- Liquor Liability (if you serve alcohol)
- Business Interruption
- Food Spoilage
- Equipment Breakdown
- Commercial Auto (for delivery or food trucks)
- Cyber Liability (especially with modern POS systems)
2. What does Liquor Liability insurance cover?
If your business serves or sells alcohol, Liquor Liability is crucial. It protects you if a customer causes harm or damage after being served—whether they drive drunk or start a fight. Many states and landlords require this coverage.
3. Do I need special coverage for food spoilage?
Yes. Spoilage Coverage protects your inventory if your fridge or freezer fails due to a power outage or equipment breakdown. Without it, you could lose thousands in perishable goods with no reimbursement.
4. Does my restaurant insurance cover kitchen fires or grease-related damage?
Commercial Property insurance typically covers fires, but if the cause is related to poor maintenance (like dirty hoods or fryers), a claim could be denied. Preventative maintenance and clear documentation are essential.
5. What is Equipment Breakdown coverage—and do I need it?
Yes. If your stove, walk-in freezer, or fryer breaks due to a mechanical or electrical issue, Equipment Breakdown insurance helps cover repair or replacement costs. Most standard property policies do not include this.
6. Is Business Interruption insurance worth it for restaurants?
Absolutely. If a covered event (like a fire or storm) forces you to close temporarily, Business Interruption coverage replaces lost income, covers rent, payroll, and even temporary relocation. Many restaurants can’t survive a shutdown without it.
7. Do food trucks need different insurance than restaurants?
Yes. Food trucks are mobile businesses and require a mix of Commercial Auto, General Liability, and Property coverage for the truck and the kitchen equipment inside. Make sure your policy covers on-site operations at events and markets.
8. What if I offer catering or off-site services?
You’ll want your policy to include off-premises liability and potentially additional insureds (event venues may require them). If you transport food, your vehicle and its contents also need to be covered under Hired & Non-Owned Auto or Commercial Auto.
9. Do bars and nightclubs have different insurance needs?
Yes. In addition to General Liability and Liquor Liability, bars often require enhanced Assault & Battery coverage, higher limits on liability, Entertainment coverage (for DJs, live music, dancing), and stricter risk management protocols.
10. Do I need Workers’ Comp even for part-time or tipped employees?
Yes. Workers’ Compensation is usually required by law regardless of hours worked. It covers medical expenses and lost wages if a staff member slips, cuts themselves, or burns their hand—even if they’re part-time or paid in tips.
11. What if a customer gets sick from my food?
That falls under Product Liability, typically part of your General Liability policy. If someone claims they got food poisoning, this coverage can help cover medical costs and legal fees.
12. Is Cyber Insurance relevant for food businesses?
Yes. If you take credit cards, online orders, or use cloud-based POS systems, you’re at risk for data breaches. Cyber Liability can cover breach response, customer notification, and legal defense.
13. Can I insure my outdoor seating area or seasonal patio?
Definitely—but it must be listed. If you expand onto sidewalks or outdoor structures, Property and Liability coverage must reflect those areas. Temporary structures like tents may require special endorsements.
14. How can I reduce my restaurant insurance costs?
- Install fire suppression systems and clean hood vents regularly
- Use employee training programs and maintain proper food handling protocols
- Report and repair slip/trip hazards quickly
Work with an agent (like us) who knows the food industry and can recommend efficient, bundled policies tailored to your needs
