Running a health-focused restaurant comes with considerable challenges as well as a sense of fulfillment and the potential for great profits. While you may feel rewarded by providing your local community with healthy meal and snack options, your business is also exposed to numerous risks that could lead to significant financial strain. For example, your property could be damaged by a fire, or an employee or customer could be injured onsite. While you cannot know what the future holds, commercial insurance allows you to plan and prepare for unexpected situations. What are the essential types of commercial insurance that your health-focused restaurant needs? Learn more below to find out.
1- General Liability Insurance
A general liability insurance policy protects your restaurant from financial loss related to a variety of situations that you are liable for throughout your operations. Specifically, this type of policy covers claims for property damage that your business causes to others. For example, a customer’s vehicle may be damaged due to negligence on the part of your employees. Your business is also liable for costs related to physical and personal injury caused by your business and employees. Typically, these claims are related to lawsuits pending against your business. The policy can cover legal fees, settled claims, or judgments up to the coverage limit.
2- Commercial Property Insurance
Commercial property insurance covers losses related to theft and damage, and it is needed for both leased and owned properties. Property damage may occur from fires, windstorms, vandalism, and other events. The policy includes damages to the physical building and other improvements, such as the parking lot, lighting, and fencing. It also includes inventory, furniture, and equipment that your business owns. When you file a claim on your commercial property insurance policy, the insurance company will assess the amount of the loss and provide compensation for repairs or replacements up to the limit of your coverage.
3- Workers’ Comp Insurance
In a restaurant, your employees are subject to numerous risks, such as slipping, falling, burns, cuts, and others. As a business owner, you are responsible for providing your employees with a safe work environment. In addition, you are liable for their related medical expenses and lost wages if they are injured while on the job. This insurance is mandatory, it also covers compensation to dependents in the event of death and compensation for lost wages in the future if the employee needs additional time to recover.
Additional Coverages to Consider
While general liability, commercial property, and workers’ compensation insurance are fundamental, there are other types of coverage that health-focused restaurants may find valuable:
- Business Interruption Insurance: If your restaurant has to close temporarily due to a covered event like a fire or natural disaster, this policy can help cover lost income and operating expenses during the downtime.
- Product Liability Insurance: As a health-focused restaurant, you may serve unique menu items or raw ingredients that could carry an increased risk of foodborne illness claims. This coverage protects you against claims related to food quality or contamination.
- Cyber Liability Insurance: With many restaurants relying on online ordering and digital payment systems, cyber liability insurance protects against data breaches and cyberattacks, covering legal fees, notifications to customers, and potential fines.
The expenses associated with everything from lawsuits and property damage to employee injuries and more can drain your restaurant’s bank accounts. In some cases, it could even lead to business closure due to the financial strain. Being properly insured against anticipated risks and events is essential.
As a business owner, you must consider the many risks of running your restaurant as a first step. Then, purchase commercial insurance policies that may be required for your business and optional coverage that offers essential benefits. Your insurance agent will help you determine the types of commercial coverage that will serve your business well in the future. By planning and choosing the right policies, you can focus on growing your health-focused restaurant with confidence and peace of mind.
