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Restaurant Insurance | Quotes & Requirements

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Restaurants can be a dream to own, but as a business owner you face certain risks such as a customer getting food poisoning, a fire in the kitchen or an employee injury. Having the right business insurance in place can help you avert financial ruin in case of disaster. Here's what you need to know about restaurant insurance to protect you and your business.

What Insurance Does a Restaurant Need?

While each restaurant will have different insurance needs, all will be required by law to hold employers' liability insurance. But that's not all they need. Here we explain some of the more common types of restaurant business insurance, including some examples to explain how each type works.

Insurance requirements for a restaurant business

We'll explain how each of these work below, but going in know that employers' liability is required for a restaurant business by law to protect employees, even staff paid in cash or working on a temporary basis. Public liability is another core component of restaurant insurance, that while not required by law, is critical to protect against personal injury or damage claims from customers or other third parties. All restaurants will also want to protect their restaurant equipment, contents (e.g. furniture) and stock. These are the core requirements for a restaurant business, but more coverage may be required as well.

Commercial Property

Restaurants owning their premises will want commercial buildings insurance (one type of commercial property insurance) to protect against damage or loss from perils like fire, flood and damage from theft. A good policy can even provide emergency helplines to assist if you have a tax or legal matter or, say, if your glass storefront is shattered.

  • Restaurant Building Insurance Example: A fire in the kitchen guts your building. Major repair work is required to . You claim on your contents and stock insurance to reimburse you for the loss so you can rebuild your business.

Contents and Stock Cover

Contents insurance (another type of commercial property insurance) can provide financial protection against accidental damage, loss or theft of valuable restaurant equipment (e.g., food graters, chippers or ovens), furniture, till systems, furnishings, and other contents of your restaurant. These items can be very expensive to replace, and you can't run your business without them. Whether you rent your restaurant premises or own them, contents and stock cover is critical.

Be sure to read the fine print regarding frozen food, because it might not be covered.

Similarly, stock insurance affords financial protection if the stock you hold is lost, stolen or damaged. However, frozen food is typically not covered (nor is a general deterioration in stock) although you may be able to pay an extra premium to get this.

  • Restaurant Contents and Stock Insurance Example: A fire results in the loss of your furniture, furnishings, computers, tills and all kitchen equipment—plus your stock. You claim on your contents and stock insurance to reimburse you for the loss so you can rebuild your business.

Restaurant Public Liability Insurance

Public Liability insurance is critical for any business that deals with members of the public, such as a restaurant. Why? If a customer or someone visiting your premises is accidentally injured, or their property damaged, they can sue you.

Public liability insurance protects against accidental injury and damage claims, covering legal expenses to defend your business and compensation claims if you're found liable. How much public liability insurance do you need? It's a personal decision but, for reference, public liability insurance is typically available with £1 million, £2 million, £5 million and £10 million of cover in the UK.

  • Bodily Injury Example: A member of the public slips and falls on a freshly mopped floor, blaming you for negligence.
  • Property Damage Example: There's a fire in your kitchen that damages the clothing shop next door to you. That business sues you for damages.

Restaurant Product Liability Insurance

Product Liability insurance protects against claims of bodily injury or property damage due to a business's goods or products—or in the case of a restaurant, primarily your food causing someone to become ill—aka, food liability insurance.

  • Product Liability Example: A member of the public falls ill after eating your food and blames you for food poisoning.

Employers' Liability Insurance

Employers' Liability insurance is required by law for nearly anyone working for you, including casual or temporary workers (there are only a few exceptions when you don't need to buy this type of insurance). EL insurance can be expensive but it protects against compensation claims by current or former employees if they fall ill or are injured because of their work for you.

  • Employers' Liability Example: An employee gets a severe burn at work, and they blame you and sue you for negligence. Plus, the NHS could claim for the cost to treat your employee and any ambulance call out charges.

Personal Accident Insurance for Restaurant Employees

Personal Accident insurance can provide a financial benefit if an employee has an accidental injury on the job and is unable to work—either temporarily (e.g., broken leg) or permanently (e.g., loss of a limb). Benefits can be in the form of a weekly payment or a lump sum amount, depending on the severity of the injury. Death can even be covered.

  • Personal Accident Example: A waiter slips and falls, breaking his wrist. Personal accident insurance can pay him a weekly amount as a benefit while he's off work due to his broken wrist.

Commercial Vehicle Insurance

Commercial Vehicle will be necessary for any company-owned mopeds or other vehicles used to make deliveries or transport goods.

Other Types of Restaurant Business Insurance

In addition, a restaurant might need commercial buildings insurance, business interruption insurance or other business insurance coverages. If your business is mobile and you sell your food at events and fairs, you may need special market trader insurance as well.

Compare Restaurant Insurance

Fill out a quote here to compare restaurant liability insurance with our commercial insurance partner QuoteZone, who will connect you with up to 5 insurance providers including specialist restaurant insurance brokers and restaurant insurance companies. You’ll have a chance to build a policy to fit your needs specifically (e.g. including restaurant equipment insurance), and ask any questions you might have before signing up.

In addition you can compare restaurant insurance costs before you buy by getting quotes for restaurant insurance online with another search engine, find a BIBA broker using their search tool, or use a direct insurer like AXA.

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When choosing a restaurant or commercial kitchen insurance policy, there are a few things to keep in mind:

  • Look for customisable cover: Make sure you can get the specific cover that you need for your situation (e.g., public liability, employers' liability, equipment, etc.).
  • Check the financial strength of the insurance underwriter: Insurance only works if the underwriter stays in business and can pay out on any valid claims. Check the health of your underwriter by looking at ratings by Fitch, Standard & Poor's, A.M. Best and Lloyd's.
  • Read customer reviews: Online customer reviews can tell you what it's like to be a customer of a certain broker or insurer—check Trustpilot and reviews.io to learn more before you sign on the dotted line.
  • Check prices in the marketplace: Since insurance quotes can vary significantly from company to company, compare the market with multiple sources—you can use a comparison site to make this process more efficient.
  • Restaurant insurance brokers: Consider using a specialist restaurant insurance broker to help you find the cover you need. Some of the best insurance companies for restaurants can only be accessed through a broker.

How Much does Insurance for a Restaurant Cost?

In the UK, restaurant liability insurance costs can start from under £1,000 a year for basic public liability and employers' liability insurance. However, restaurant business insurance costs can rise into the many thousands of pounds depending on the risks you want to insure against. For example, most businesses will want restaurant equipment insurance, contents insurance and stock insurance to protect against certain types of damage (e.g. a fire, flood or theft). As a result, the average cost of business insurance for a restaurant can easily reach into the thousands of pounds.

Also, the following factors can affect the cost of your restaurant business insurance in the UK:

  • If you have a deep fat fryer in the kitchen
  • If you have an ATM on site
  • If your restaurant is licenced or unlicensed
  • The number of late licenses
  • If you offer public entertainment
  • The number of employees
  • Coverage limits
  • Coverages (e.g., public and product liability, employers' liability, business interruption, legal expenses, personal accident, buildings, building improvements, contents, stock, liability, commercial vehicle, etc.)
  • Claims history
  • And more

Your premiums might vary significantly depending on your situation and the details of your application.

FAQs

Insurance for a restaurant can cover a wide range of risks, such as injury to customers (public and product liability) or employees (employers' liability), damage to the contents of the restaurant (contents cover), loss of revenues due to fire or flood (business interruption insurance), help with legal expenses for contract disputes or tax investigations (legal expenses cover) and more.

To protect against the risks faced by the industry, a restaurant typically needs public liability insurance, employers' liability insurance, contents cover and stock cover. Plus, a restaurant might needs buildings insurance (if they own the building), cover for improvements made to a building (if they don't own it but they made improvements), business interruption cover, legal expenses or other types of restaurant insurance.

In the UK, there are three main types of liability insurance for a restaurant: employers' liabilty insurance, public liability insurance and product liability insurance. Employers' liability insurance is required by law and protects situations where someone who works for the restaurant is injured or falls ill due to their work. Public liability for a restaurant is effective if a third party like a customer suffers injury or damage and the restaurant is blamed for negligence. Product Liability insurance protects a restaurant against claims of injury or property damage if their food causes someone to become ill, such as via a foodborne illness.

Yes, restaurants need public liability insurance. It's not required by law, but every restaurant should have it. Public liability protects against accidental injury to members of the public, like customers. So if a customer slips on a wet floor and sues, public liability insurance would help defend against the claim.

The only type of insurance a restaurant would need by law is employers' liability insurance. Employers' liablity covers situations where someone working for the restaurant is injured or falls ill due to their work. It is even required by law for temporary or part-time workers, even those paid in cash.

While by law it's not required to hold public liability insurance to run a restaurant, every restaurant should have it as well as employers' liability. And there are other types of insurance most restaurants will need such as contents and stock cover, business interruption and more.

Business interruption insurance covers lost income or extra working costs if a disaster leaves the restaurant unable to trade. For example, if a fire means your doors are shut to diners for 6 months while the damage is repaired, business interruption could cover the lost turnover. Business interruption insurance can also cover extra working costs. For instance, if instead of shutting the doors during the repair work, the restaurant decides to temporarily relocate to a suitable, available site nearby (admittedly this would be hard for a restaurant to find!) in order to keep trading, the insurance could cover the costs involved in the extra working costs involved (instead of the lost revenue, for instance).

Restaurant Statistics

According to our analysis of ONS data on British household food budgets, the average household spends £32.80 a week on restaurant and cafe meals, drinks out of the home and takeaway meals and snacks—that's over £1,700 a year!

  • Number of restaurants in the UK: 88,800 (in 2018)
  • Number of people employed by restaurants: nearly 1 million
  • Average restaurant and catering establishment managers and proprietors pay: £29,403 (full time)
  • Average chef pay: £23,778 (full time)
  • Average pay of waiters and waitresses: £16,286 (full time)
  • Total restaurant and cafe meal spending per household: £1,009 per year
  • Total alcohol spending out of the home per household: £416 per year
  • Total spent on take away meals eaten at home: £281 per year

Sources

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The guidance on this site is based on our own analysis and is meant to help you identify options and narrow down your choices. We do not advise or tell you which product to buy; undertake your own due diligence before entering into any agreement. Read our full disclosure here.