Published On: September 24, 2021

The entire country saw restaurants take a giant hit during 2020 because of the pandemic. Workers had to be laid off or furloughed while restaurants and bars were shut down. Even businesses who found creative ways to keep their food cooking had to downsize in some way to accommodate the changes. According to, the entire industry lost approximately $280 billion during the first 13 months of the pandemic.

While 2020 was hard for restaurants, 2021 has been a different story. Many businesses are seeing higher sales than their pre-COVID numbers in February 2020. This is despite the changing requirements restaurants and bars face around the country, including vaccine credentials, face masks, distancing protocols, etc.

So, how has all this affected restaurant and bar insurance?

For many businesses, it has required a closer look at coverage options. Business owners have always had to carefully weigh the risks vs cost of insurance coverage, but it looks a little different now. People want to know what is covered in cases of these types of emergencies and if they can keep their businesses covered under government closure situations.

Along with that, what kind of coverage is used when a restaurant or bar is linked to an outbreak? There are risks involved with letting patrons indoors when there is a pandemic still going. New York City and San Francisco are requiring all patrons 12 years of age and older to be vaccinated with at least one dose for indoor dining.

Many other businesses are just requiring face masks by all patrons, whether vaccinated or not. That way, their bases are covered.

The potential for lawsuits and injuries are high on every side of the issue. Restaurant insurance requires businesses to work under their plans if they want coverage. The result is that restaurants and bars are put in the middle, with questions about their general liability insurance.

There are other areas of concern that need to be addressed too.

Restaurants and bars are working to adjust their business plans to meet specific criteria to open and then stay open. Everything from adding outdoor seating, now offering takeout and delivery, and changing hours worked by staff all could require changes to coverage.

The Rise of Insurance Rates

All restaurant and bar insurance policies should be rechecked by the end of the year to be sure they are covered by updated needs and business models.

An example of changed coverage might include offering takeout meals. For best coverage, the business should have a general liability policy to cover liability dealing with their foods and products consumed off the restaurant or bar premises. If a business has hired drivers for meal delivery or bought a vehicle to offer catering, adding commercial auto insurance may be required.

Adding more seating outside may require expanding commercial property insurance to cover that area. Liquor liability insurance also needs to be examined, along with an area’s specific laws, to serve within the rules defined (i.e. where the alcohol is consumed, how it is given, etc.).

Costs Will Go Down

With so many restaurants and bars still working to reopen, it is important to remember that while insurance rates may be forecasted for higher in the short term, they will come down as more businesses reopen. Recovery in the food industry has also shown a spike in new restaurants and bars opening in the first quarter of 2021.

If you own a restaurant or bar, the insurance rates are an important factor in operation costs. If you would like a quote on restaurant insurance programs or someone to discuss coverage options with, contact Tabak Insurance today. We can help you decide what is right for your business.

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