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Business Insurance for Restaurants
All types of business involve a range of risks, and restaurants are no different.
Restaurants arguably face a much wider range of risks than most other business types, but thankfully they can be protected.
In this guide we’ll look at the major risks faced by restaurant businesses and the insurance solutions available to them.
If you’d rather just speak with one of our experts over the phone rather than doing everything online you can call our office direct on 1300 542 245.
Types of Insurance
Just as there are a range of risks faced by restaurants, there are also a range of insurance types available to restaurant owners.
Some of the most common forms of restaurant insurance are as follows:
- Public & Products Liability (Broadform Liability)
- Business Property & Contents
- Deterioration of Stock
- Machinery Breakdown
- Business Interruption
These aren’t the only forms of cover available, but they are certainly the most common for a typical restaurant.
As a business owner it’s also worth considering personal insurance, such as income protection and life insurance.
Risks for Restaurants
Although your customers may not consider restaurants to be dangerous places, the fact is there is a lot of potential for risk.
Starting with the kitchen, this area is virtually a recipe for disaster. There are chefs and kitchen hands rushing around, along with hotplates, flames and boiling liquids.
Thanks to the safety measures in place many kitchens will never experience a serious fire, but it is certainly an ever-present danger.
You are also at financial risk if your customers suffer as a result of negligence within your business.
This could be as a result of a ‘slip and fall’ injury or as a result of food poisoning.
Either of these events could result in large damages being awarded against you, and without the right insurance these amounts would have to come out of your pocket.
There are many more risks to consider, and in the table below we have listed a number of those risks along with the insurance types available to combat them.
RISK 1: Slip and fall injury
INSURANCE TYPE: Public Liability
DETAILS: This is a big one for a restaurant. Public liability insurance can cover the costs if a customer tries to sue you
RISK 2: Food poisoning
INSURANCE TYPE: Public Liability
DETAILS: If any of your customers suffer food poisoning your insurance can cover the costs if they take action against you
RISK 3: Theft of contents / stock or money
INSURANCE TYPE: Theft / Money / Contents / General Property
DETAILS: A combination of these can cover your contents / stock and cash in the event of theft
RISK 4: Damage or loss due to fire / storm etc.
INSURANCE TYPE: Contents / General Property Cover
DETAILS: A combination of these cover types can protect your contents and stock in the event of a fire / storm / lightning etc.
RISK 5: Food spoilage
INSURANCE TYPE: Deterioration of Stock
DETAILS: If you lose stock due to the failure of a fridge or freezer, this insurance can cover the cost of replacement
RISK 6: Financial losses due to employee dishonesty
INSURANCE TYPE: Employee Dishonesty
DETAILS: Covers losses which have been caused due to dishonest actions by your employees
RISK 7: Revenue loss due to external interruptions
INSURANCE TYPE: Business Interruption
DETAILS: If your restaurant is unable to operate due to external interruptions, this cover can protect your revenue for a period of time
RISK 8: Personal injury suffered by staff
INSURANCE TYPE: Workers Compensation
DETAILS: This cover is separate to a normal business insurance pack and is mandatory as set by each state government
Please note that the table above contains generic information about restaurant insurance policies, and does not reflect any one particular policy available.
If you request a quote or more information from us we will be able to provide the specific wordings for the policies we have quoted.
The costs involved in restaurant insurance will depend on a number of different factors.
As with any business taking out insurance, three of the main factors affecting the cost include the amount of cover required and the size of the business in terms of revenue and staff numbers.
When dealing with restaurants specifically there are a number of other factors which may affect the premium, as detailed below:
- How many people does your restaurant seat?
- Is your restaurant licensed, BYO or otherwise?
- Do you do any deep frying? And if so, what size is the fryer?
- What security and fire protection measures are in place?
Your insurance broker will run through all of these questions with you, but it’s good to know upfront what will be asked and what impact the answers will have on your cover.
Although restaurant insurance can appear quite straightforward on the surface, it can start to become more complex when you start delving deeper into the various options available.
You can take the DIY approach and contact an insurance company directly to take out cover, but most experienced restaurant owners would agree that this is not the best option.
An insurance broker with experience in looking after restaurants will be a far better option, as they can help you to analyse your risks and put together an insurance package that will suit your needs.
Your insurance broker will also be able to help you find the best priced policies available, and will be there to look after you in the event of a claim or if you need to make changes to your cover.
We can put you in touch with a qualified and licensed insurance adviser who will be able to assist you.
Simply complete our online quote request or call us on 1300 542 245 to speak with one of our team members.