Restaurant and hospitality insurance is a massive part of what you do from the kitchen to the front of the house and everywhere in between. The dream of opening a restaurant, catering, serving others, and living your passion is just the beginning of managing a hospitality business in the modern day. A study released in 2020 revealed that nearly 100,000 non-fatal injuries occur in this sector every year, and you must take steps to prevent your business from falling victim to massive (and sometimes unnecessary) insurance claims.
Restaurant and Hospitality Liabilities
When you start a new business, you must complete a risk assessment and use that information to purchase hospitality insurance. However, the risks facing your restaurant or hospitality business are diverse and numerous because it’s such an active industry. (You don’t want to miss anything.)
Common hospitality risks and liabilities include:
- Spoilage
- Equipment damage or breakdowns
- Utility interruptions
- Liquor liability
- Special events
- Crime
- Employee concerns
- Workers’ compensation
- General liability (for patrons and visitors)
- Commercial automobiles
Remember, too, that these liabilities feed into one another. For example, you may have a server drop a plate of glasses. A shard of glass cuts the worker when it hits their shoe, bounces up, and cuts their leg. At the same time, a shard of glass could injure a patron. Now, you must file a claim against your workers’ comp insurance and your liability policy—all based on a single event.
Moreover, the restaurant insurance policy you purchase should be tailored to address the upper limits of the liability you face.
For example, a steakhouse that has tens of thousands of dollars in steaks aging in a refrigerator for weeks at a time will lose substantially more money and income after a power outage than a business that can store all its ingredients in a dry locker (or one that uses significantly less expensive products.)
Moreover, you need property and liability insurance that protects things like:
- Your building
- Computers and electronics
- Signage and marketing materials
- Kitchen gear and small appliances
- Large appliances
- Furniture throughout the space
- Every property you manage
Therefore, restaurant and hospitality insurance should be a customized policy that would look unrecognizable to your colleagues in the industry. They have their insurance and you have yours.
Off-Premises Hospitality Concerns
As a restaurant or hospitality business owner, you must consider what happens when you make deliveries, cater events, or travel to serve your customers.
Off-premise liability coverage safeguards your business income and supplies when you’re not in the facility. This is especially important if you own a catering business or handle more deliveries than the average restaurant.
You may also purchase off-premise property coverage to handle any damage done to someone else’s property while under your care.
For example, you’re a caterer who arrives at a massive wedding venue with its own kitchen. You set up in the kitchen and equipment belonging to the facility is destroyed or damaged. Your off-premises liability insurance will handle that claim. The same is true of off-premises equipment breakdown coverage.
Managing a Safe Restaurant or Hospitality Business
A well-insured hospitality business should be paired with quality safety programs. Your business should post (and closely adhere to) safety protocols for managing the kitchen, food, food storage, etc.
You should require your employees to wear closed-toe shoes, operate under particular guidelines, and use tools or appliances in a certain manner.
A hospitality business or restaurant might also invest in training classes for its staff. You might want your managers to be certified in managing a kitchen or restaurant, or you may want to get certified yourself so that you can teach these courses to your employees.
Contact HomePort Insurance for Assistance With Restaurant & Hospitality Insurance
Contact HomePort Insurance when you need help with restaurant and hospitality insurance coverage. You may need to review your current coverage, upgrade, or add policies that better address the needs of your business. Our expert team is happy to help you understand the best way to protect your most important investment.
