Restaurant liability is a complicated topic, and it can be somewhat intimidating for new restaurant owners. First, you need to figure out what restaurant insurance you need, and then you need to figure out which restaurant insurance is best. Depending on what you’re serving, you may even need more than one type of insurance or a highly specialized form of insurance.
If you are franchising, the issue becomes even more complicated because you can’t always just follow what other franchises are doing. Your location, the specifics of your franchise, restaurant liability insurance’s average cost, and even local or state laws can greatly impact your choice. Not all franchises have the same restaurant insurance plan; here’s why.
Your Business Details Matter
How you run your business makes a big difference in your restaurant insurance needs. For example, if you serve liquor, you must also factor in liquor liability insurance. If you live in an area prone to natural disasters (like the California fire zone last year), you may need to take out “loss of business income insurance” to protect you from financial losses should an event ever occur. If you have multiple employees who work more than just casually, you will often also need to consider health insurance and benefits.
Not Every Franchise Is Run the Same
While franchises are inherently similar, they are not identical. A franchise operating on the shores of Maine will likely serve different foods and operate in a slightly different way than a franchise deep in the heart of Alabama. Similarly, one franchise might decide to serve alcohol and stay open late, while others may choose to close at five and keep their establishments dry.
Restaurant Liability Insurance: Average Cost
Restaurant liability insurance’s average cost varies between franchised restaurants, meaning it’s wise to investigate your options rather than saying yes to the same offer as another franchise. While it’s impossible to determine a true average cost without knowing the details of your business, you can expect to pay at least a few hundred dollars for basic restaurant insurance for a smaller establishment. Larger, more complex restaurants may demand thousands of dollars in restaurant insurance payments to cover specific areas.
Essential Restaurant Insurance Options
Once you figure out your situation, you need to consider which restaurant insurance options are essential and which may be secondary or elective. No matter what state or city you operate in, standard general liability, liquor liability, food contamination, and worker’s compensation coverages are a must.
Some franchise agreements may require individual business operators to choose a higher amount of restaurant insurance than the state or city’s bare minimum. This is something important to review in each contract signed.
From there, you have the ability to choose whether or not to take out electives like loss of business income, group health insurance, group life insurance, property insurance, or vehicle insurance. Some businesses decide to go with umbrella policies that address every aspect listed here at the same time, while others may find it more affordable to take out insurance piecemeal. What matters most is that you understand paying for insurance now is often far more affordable than dealing with the fallout of not having insurance later on.
Have questions about which restaurant insurance is right for your franchise? We want to help you find your way. Contact Tabak Insurance for more information.