When you own a business, you’re going to have to deal with many different costs, including a variety of insurance policies. However, many bar and restaurant owners operate on an extremely tight budget, and there’s simply no way to predict when the unexpected will happen, causing the budget to get even tighter.
Unfortunately, this often leads these owners to reconsider whether they could save some by reducing their commercial insurance policy coverage.
At the same time, they understand that they need enough coverage to protect their business in specific situations.
Still, there’s nothing wrong with re-examining your budget and finances to determine whether or not you’re paying too much for restaurant or bar insurance. In fact, this is something you should do on a regular basis.
That doesn’t mean you should just cancel your insurance out of a knee-jerk response to a tighter budget. It does, however, mean that you should look at the types of insurance you have and find out if you have too much/too little/too expensive coverages.
To that end, let’s take a look at the most common types of coverages and why they may be important to your business and if you are paying too much – or too little – for your bar or restaurant insurance.
General Liability and Property Insurance
Your restaurant or bar policy should include general liability insurance to take care of your legal expenses in the event that you are sued. This includes injuries that occur on your premises, illness from food served by your establishment, third-party property damage, and copyright infringement.
Property insurance protects you in the event that your establishment and its contents are damaged due to events such as weather, theft, and fire. Items included in property insurance coverage are things like furniture, kitchen equipment, and any other property used to serve food or beverages to your patrons.
So, how can you save money on these two types of insurance cost?
Combine them by opting for a business owner’s policy (BOP). This policy includes both types and can cost under $2600 yearly. If you own a small restaurant, you may be able to obtain discounts on BOP coverage.
The bonus of BOP coverage is that many of these policies also include Business Interruption Insurance, which offers reimbursement for lost income if you have to rebuild or repair your restaurant or bar following property loss.
Liquor Liability Insurance
Some states don’t require establishments to carry liquor liability or bar insurance. However, if you don’t have this coverage, you can be held liable for any injuries or damages caused by an inebriated patron who acted or conducted themselves in a manner that led to injuries or damaged properties.
Should this happen to your business, it could end up costing you thousands of dollars.
An example of this would be a patron who becomes intoxicated at your establishment and then gets into his or her car and injures or kills someone on the way home.
In addition to paying for the driver’s damages, a victim’s family could sue you, and you’d be liable for all the costs if you don’t have bar insurance.
The bottom line is that you really need the protection that liquor liability insurance provides, especially when it can cost you under $4000 per year to have.
Is that too much? Not if you compare it to the potential costs of complete liability.
Workers’ Compensation Coverage
You’re definitely not paying too much by having coverage for your staff. After all, without them, your establishment would be impossible to run.
Not only that, but with all of the dangerous conditions that exist in food service establishments, including broken glass, greasy kitchen floors, and similar risks, getting the right small business insurance is a must.
Now, it is possible that you’re paying too much for workers’ comp if there have been some significant changes to your operations over the years. This is something you should review with your insurance agent when your employment situation changes.
The Coverage You Need at the Best Possible Price
No two restaurants or bars are alike, and neither are their insurance needs. When you want to make sure you’re not paying too much for restaurant insurance, Tabak Insurance Agency can help you determine your exact coverage needs.
Our thorough business evaluation can get you the best possible price on your insurance. Find out how.