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The premium you'll pay for restaurant insurance in the UK depends on the size of your restaurant, turnover, location and what coverage you want, among other things. For both experienced restaurateurs and those just opening a new restaurant, we delve into these factors to discover how much restaurants pay for different type of coverage. While the amount you pay will depend on your business, here's what we found to give you a broad idea of costs for restaurant insurance.
Average Cost of Restaurant Insurance
The average cost of business insurance for a restaurant varies widely, but the cheapest cover starts from as little as £500 a year or so for basic public/product liability and employers' liability coverage for a small restaurant in the UK (taking into account both public liability costs and employers' liability costs).
However that's the cheap end of the range. You're likely to want more coverage—and pay more as a result. For example, most restaurants have thousands of pounds invested in their contents and stock, which can be protected with aptly named contents insurance and stock insurance.
To give an example of pricing for these important coverages, adding cover for £50k of contents and £10k of stock for our sample small restaurant added up to £2,000 to the price of restaurant insurance. The value of the stock and contents you're insuring will have a direct bearing on your premium. It usually costs more to insure goods worth a higher amount.
|Average cost of restaurant insurance per year|
|£2m Public Liability (PL), Employers' Liability (EL)||£725|
|PL, EL, £10k Stock, £25k Contents||£880|
|PL, EL, £10k Stock, £25k Contents, £25k Tenants' Improvement||£1,267|
|PL, EL, £10k Stock, £25k Contents, £250k Buildings||£3,572|
Restaurants also might want additional coverages such as legal expenses and personal accident cover for employees. The cost of legal expenses cover is usually pretty consistent across different business industries—from around £72 a year or so. The cost of personal accident insurance depends on factors like the number of employees you're covering. You can roughly expect to pay in the range of £45 to £80 per person for personal accident insurance for restaurant employees.
Cost of Tenants' Improvement Coverage for a Restaurant
Many restaurant owners have invested in renovations to turn a bland commercial property into a functional and attractive space. If you have a commercial lease for your restaurant and you've invested money into making the space just right for your needs, consider getting tenants' improvement coverage. We found the cost of tenants' improvement coverage for a restaurant to be around £500 a year assuming the renovations cost you £25,000, but the cost will vary depending on many factors. And improvements costing more or less would affect the premium accordingly.
Cost of Buildings Cover for a Restaurant
If you own the building housing your restaurant, you'll want to buy commercial buildings insurance to cover loss or damage to the building—for example, to cover the cost of rebuilding it in event of a fire. The cost of buildings insurance for a restaurant will depend on factors like:
- Your location
- If the building is prone to flooding
- The type of building and roof
- The rebuild cost
Sample quotations we found in the UK marketplace showed that buildings insurance for a restaurant could cost anywhere from £500 to £5,000 a year for a building with a rebuild cost of £250,000.
Other factors that influence your restaurant insurance rates
Many additional factors can have a bearing on the amount you pay to insure your restaurant. For instance, your location alone can impact prices by 20% or more. Here are some common factors that can affect your restaurant business insurance rates:
- Coverage limits
- Add on coverages
- Previous claims history
- How you pay (monthly vs. annually)
- What you offer (alcohol, entertainment, cover for events, an ATM, etc.)
- Number of employees
- Value of property (e.g., building, stock, equipment, contents)
Finally, if you're in the market for restaurant insurance be sure to get quotes from more than one source. Quotes can vary widely from one insurer to another, so if you only go you one source there's a potential for you to overpay—a lot in some cases. Also, read through all the terms and conditions of a policy before signing up so you know what you're covered for, and what you're not.
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