In the food industry, every restaurant business brings its own flavour and style to the table, but the one thing they all have in common is the need for the right insurance. Let’s take a look at some of the ways business insurance can benefit and protect your restaurant.
Advantages of insuring your business
When it comes to securing your restaurant business for the long run, insurance brings many advantages and should be one of the first things you consider when creating your business plan. You’ve worked hard to get your business up and running so the last thing you want is for an unexpected event that leads to a claim to send you out of business.
Here are 4 advantages of insuring your restaurant business:
- Helps defends against lawsuits- imagine a customer injures themselves or contracts food poisoning. Your public liability insurance is there to help cover the related legal costs of defending your case and compensation if awarded, expenses which can cost a small fortune.
- Bankruptcy- can you imagine the financial devastation if a fire was to break out at your restaurant reducing it to rubble? Do you have the financial means to get your business back up and running to how it was before a disaster? Insurance policies are there to protect your restaurant business from real risks which could send your business bankrupt.
- Equipment and building- rest easy knowing that you can insure and protect your business building and assets from unforeseeable disasters.
- Reputation- protect your restaurant’s hard-earned reputation by having the right levels of insurance in place if a claim were to occur. The last thing you want is to be the talk of the town for all the wrong reasons!
Types of business insurances your restaurant should consider
Having Public Liability insurance should be one of the first things on your business plan’s menu. It offers your restaurant financial protection in case a customer, supplier or any other third-party experiences an injury at your restaurant.
It is important to remember that Public Liability insurance doesn’t cover your employees, you will need to arrange a Workers Compensation policy to cover them.
There is an endless list of accidents that could happen in a restaurant. A customer could slip on wet floors or trip over, a waiter might accidentally spill hot food or drink over a customer, or a kitchen fire could cause major damage to the premises you lease. Food poisoning is another real risk restaurants need to consider.
It’s enough to make anyone cringe, but when you’re the one at fault, things become a whole lot more sickening. In the restaurant industry, food poisoning is something that could happen no matter how much care you take.
What a lot of restaurant owners may be unaware of is the costs associated with defending a claim against you can run into the hundreds of thousands of dollars, something Public Liability insurance covers.
In a nutshell, Public Liability insurance covers you for following:
- Compensation awarded to third parties if the actions of your restaurant cause injury or death on your business premises or another location (pop-ups, market stalls, catering at venues)
- Compensation to third parties for loss or damage caused to their property as a result of your business activities
- The related legal costs of defending your claim e.g. defence, court attendance costs
There’s a lot of ingredients that go into making a restaurant a success- your friendly staff, the great food you serve but equally important your business assets too. How would you be able to function without them? Here are some of the areas to consider covering:
Building Cover: if you own the building your restaurant operates from, the policy will pay for repairs or the cost of rebuilding if it is damaged or destroyed due to an insurable event such as fire or storm damage.
Contents Cover: protect all the things that help keep your restaurant running, from chairs to tables, those little things like cutlery, artworks you may have on your restaurant walls and yes even the kitchen sink. Your stock is also covered if It is destroyed by an insurable event.
Business Interruption Cover: if your restaurant was unable to open its doors due to an insurable event, such as a fire in a kitchen, how would your business survive financially? Business Interruption helps to keep some of your income flowing for when disaster strikes and you need to hang up the apron.
*It is important to note that this kind of cover is only available if you insure Building or Contents.
Glass Cover: financial protection for the cost if you need to repair or replace internal or external glass which is accidentally damaged or broken.
Machinery Breakdown Cover: provides vital cover for when your cool room, fridge or even coffee machine breaks down or suffers motor burn out. Could you afford to fork out for repairs or replacements? This type of cover can also include an extension to cover the loss of stock due to your refrigerator or cool room breaking down.
Having the right insurances to protect your restaurant business means you can rest easy at night. Taking to an insurance expert can help put you on the right path by making sure you’re covering your business for the things that matter.