Restaurant Insurance Cost

What Does Restaurant Insurance Include? *

Restaurant insurance is typically a package of policies designed to cover various risks. Some of the most common cover types include:

• Public Liability Insurance:  This may cover claims made by customers or members of the public for injuries or damage that occurs at your restaurant.
• Property Insurance: This may cover damage to your restaurant property, including the building, kitchen equipment, furniture, and inventory.
• Product Liability Insurance: This may protect your business if a customer gets sick from food or drink provided by your restaurant.
• Workers’ Compensation: Covers employees who are injured or become ill due to work-related activities.
• Business Interruption Insurance: This may cover cover lost income if your restaurant must close temporarily due to an insured event.

Real-World Risks to Consider *

Owning a restaurant can be unpredictable. For example, in 2014, acclaimed chef Neil Perry’s Rockpool restaurant in Sydney suffered a devastating fire. However, because Perry had the right insurance policies in place, his business was back up and running in just a month.

Many small hospitality businesses may not recover from such disruptions. Mark Vanzo, managing director of Smart Business Insurance, notes, “Many owners don’t fully appreciate the amount of exposure they have. Being forced to close for several weeks can be devastating.” Business interruption insurance, which may help cover ongoing business overheads, is crucial in such scenarios.

How Much Is Restaurant Insurance? *

• Public Liability Insurance: From $500 to $5,000 annually, depending on your turnover and business activities.
• Property Insurance: This can cost from $1,000 to $5,000 per year depending on the value of your building and contents.
• Product Liability Insurance: Often bundled with public liability insurance, coverage costs for product liability insurance can vary based on several factors, including your business turnover, claims history, risk management practices, and location.

How to Find Affordable Restaurant Insurance *

Finding affordable restaurant insurance doesn’t mean you have to compromise on protection. Here are a few tips to help lower your premiums:

• Bundle Your Policies with a Business Pack: By ‘packaging’ your business insurance into a Business Pack (or ‘Bizpack’), you may cover common risks in one flexible policy. Bizpack insurance can help streamline coverage, and because insurers group multiple risks, they might offer better premiums than purchasing individual policies.
• Increase Your Excess: By opting for a higher excess (the amount you pay when making a claim), you can lower your premium.
• Compare Quotes: Always compare quotes from multiple insurers to ensure you’re getting a reasonable rate. A Smart Business Insurance broker may be able to help you compare quotes from multiple insurers and find appropriate cover for your business.

Factors That Influence Restaurant Insurance Costs *

The cost of restaurant business insurance varies based on several factors:

• Size of Your Restaurant: Larger establishments with more employees, customers, and equipment generally have higher premiums.
• Location: Your business’s location can affect costs. Restaurants in high-crime areas or areas prone to natural disasters (like floods) may face higher premiums.
• Risk Management: Restaurants that implement strong safety protocols may be eligible for lower premiums, as they present a lower risk to insurers.
• Type of Coverage: The more comprehensive the coverage, the higher the cost. It’s essential to balance adequate coverage with affordability.

As Vanzo notes, even when restaurant owners believe they have adequate cover, it’s crucial to review policies. “Many clients think they’ve done the right thing, but upon closer inspection, we find gaps in coverage,” he says. Ensuring proper coverage for theft, contents, and specific risks is vital to avoid underinsurance.