What is restaurant insurance?
Hot kitchens, a daily influx of customers and the fast-paced nature of the work mean running a restaurant comes with risks.
Restaurant insurance could provide the cover you need to protect your staff, customers and your own livelihood.
Why do I need restaurant insurance?
As the past year or so has taught us, things can seem to be ticking along nicely, then something comes along to throw you completely off track. So it’s important to be prepared for any setback that could affect the smooth running of your business.
Your restaurant may have food, furniture and expensive specialist kitchen equipment that’ll need protecting against theft and damage. Any disruption to your business can be damaging too, as your customers rely on your business’ service and availability.
Also, you’ll need to think about what cover will protect you against claims from members of the public. What if a customer gets food poisoning? Or slips on a greasy floor?
And if you employ staff, you’re legally required to have employers’ liability insurance for any employee who isn’t an immediate family member.
What type of insurance do I need for my restaurant?
There are several types of insurance you can include in your policy to help protect your restaurant, including:
Public liability insurance: If, for example, a member of the public becomes ill because of the food you’ve provided, or slips and falls on your premises, you could claim on your insurance to cover any compensation due to them, or any legal costs if they take you to court.
Business contents insurance: This typically provides cover for all your stock if there was a break-in or a fire. It can also cover furniture, fittings, tills, kitchen equipment and possibly freezer contents, too. There’s also the option of getting cover for any cash on the premises.
Employers’ liability insurance: This could cover you if one of your employees becomes ill or is injured as a result of working for you. If you employ one or more people or are a limited company with multiple directors, it’s a legal requirement to have cover. If you’re not a limited company, it’s not a legal requirement to have employers’ liability insurance if the employees are immediate family members, though if a policy is in place it would still cover immediate family members working for you.
Business interruption insurance: This insurance can help cover any loss of income if trading is interrupted and if you have to close your restaurant for a period of time.
If you buy a new business interruption policy, be aware that it’s unlikely to cover claims against events that are already taking place. This means COVID-19-related claims are unlikely to be covered.
Buildings insurance: If you own the building where your restaurant is located, you’ll need buildings insurance to cover the cost of repairing any damage to the structure of your building, or rebuilding it if necessary. If you rent the space, your landlord is responsible for buildings insurance.
In what situations could restaurant insurance help?
With hot surfaces, sharp implements and other hazards all around, your restaurant is open to all sorts of risks.
Here are some common scenarios in which the right type of insurance could help protect you and your restaurant:
- If a sous chef slips on a damp floor and burns their hand on one of the hobs, employers’ liability insurance could cover the medical costs, compensation and legal fees if they make a claim against you.
- If a waiter spills soup, scalding a customer, public liability insurance could cover damage and injury costs if a claim is made against your restaurant.
- Product liability insurance could protect you if, for example, your restaurant sells a product made by another company, and the product causes an injury to the customer. For instance, your restaurant might sell plastic cups for takeaway purposes, and a customer cuts their lips on the plastic cup, or it comes loose due to a manufacturing fault and the hot drink scalds them.
- If there’s a fire in your commercial kitchen or your restaurant is flooded, business contents insurance could cover the costs of repairing or replacing expensive kitchen equipment and furniture. If you have to close the restaurant for repairs, business interruption insurance could help protect you against loss of earnings.
- Some insurance policies also offer new for old equipment cover. This means if a brand new kitchen fryer is destroyed in a fire or is stolen, you could receive an exact replacement if a claim is made.
- Loss of alcohol licence cover could reimburse you for loss of revenue and product value, as long as you didn’t lose the licence through misconduct.
How can I protect my staff and customers during the COVID pandemic?
As a business owner, you have a duty of care to all your staff and customers to make them as safe as possible. That’s why it’s important to follow strict hygiene and safety practices.
To help protect your staff and customers, it’s recommended that you:
- Carry out regular assessments of the risks of COVID-19 in your workplace
- Provide adequate ventilation inside your restaurant
- Wear personal protective equipment (PPE) including disposable gloves and face coverings while handling food
- Frequently wash hands thoroughly and clean utensils before each use
- Set up an online booking system and reduce the number of customers in your restaurant at any one time
- Make sure hand sanitiser is available at the entrance to all communal areas
- Follow social distancing guidelines if delivering food, and avoid accepting cash tips
- Clean and disinfect objects and surfaces frequently, paying close attention to shared equipment
Find more information on the Government’s guidance for restaurants.
Frequently asked questions
How do I calculate the value of my stock?
When you take out business contents insurance for your restaurant, you’ll need to include an estimated value of your stock. This includes wine and spirits.
You’ll need to calculate the ‘trade’ value of your stock, not the ‘retail’ value. In other words, how much it would cost you to replace your stock.
Be aware of any seasonal adjustments you may need to make to your ‘sum insured’ amount. For example, you may have an increased stock of alcohol in busy periods like Christmas and Easter, and you may need to adjust the maximum value at risk, to ensure you’re not underinsured.
Some insurance providers automatically include seasonal variations, so check your policy details to see if you’re covered.
What extras should I add to my restaurant insurance?
You can tailor your cover to the needs of your business. Added extras will usually increase the price of your premium, but you might want to think about:
- Legal expenses cover – if a claim is made against you, this can help with legal bills like solicitors’ fees. Some providers also offer expert advice on a range of legal matters, from employment law to health and safety.
- Money cover – this can protect any cash you keep in the till or locked in a safe on the premises. It’ll usually also cover money in transit, for example if you take the day’s earnings home or to the bank after cashing up. But please note, currently we don’t offer comparison for money cover.
How can I find a good deal on restaurant insurance?
All you need to do is start a quote with us and we'll help you find the most competitive prices among the providers we compare for the different types of insurance you may need for your restaurant. Whether you own a takeaway, diner, curry house or bistro, comparing with us couldn’t be easier. Get a quote in just a few minutes to see if you can save.
What do I need to get a quote?
We’ll need some details about your business, including:
- Business name, address and postcode
- How long you’ve been trading
- Forecasted turnover for the next 12 months
- How many employees you have
- Your claims history
- The type of cover you want
Once you’ve completed your quote, we’ll show you a list of quotes to compare.
Start a quoteWhat our expert says...
“Dealing with food in a fast-paced environment means that every day, staff and customers are exposed to possible risks. As a restauranteur you’ll want to ensure you have the right insurance in place should an accident happen.
“Consider exactly what risks your restaurant faces and which insurance protection you’ll need. This will help you build a business insurance policy that works for you.”
- Mubina Pirmohamed, Business and landlord insurance expert
