Running a restaurant comes with a unique set of risks, from kitchen accidents and property damage to liability claims. Restaurant insurance is essential to protect against these potential pitfalls, but understanding the cost of insurance can feel overwhelming. Here, we’ll break down the factors that affect restaurant insurance costs and what you can expect to pay for comprehensive coverage.

What is Restaurant Insurance?

Restaurant insurance typically consists of a variety of policies bundled together to protect against common risks in the industry. These policies generally include:

• General Liability Insurance: Covers claims from third parties for injuries, accidents, or damages.
• Property Insurance: Protects the physical assets of the restaurant, including equipment, inventory, furniture, and the building.
• Workers’ Compensation: Required in most states, this covers medical expenses and lost wages if an employee is injured on the job.
• Liquor Liability: For establishments that serve alcohol, this covers liabilities related to alcohol-related incidents.
• Commercial Auto Insurance: Essential if your restaurant has delivery vehicles or requires employees to use their cars for work.
• Business Interruption Insurance:: Covers lost income if the restaurant has to close temporarily due to a covered event like fire or natural disasters.

Watch: Reviewing your policy is a way to unlock savings.

Key Factors Influencing Restaurant Insurance Costs

The cost of restaurant insurance varies based on several factors, including the type of restaurant, location, number of employees, and the types of coverage needed. Here are the primary factors that influence the cost:

1. Type of Restaurant – A fine dining restaurant with high-end equipment and a larger space may have different insurance needs compared to a small café or food truck. Full-service restaurants, for example, often pay more due to their increased square footage, alcohol sales, and higher risk factors. At Tagrisk, we will help assess your risk and tailor a policy to your needs.

2. Location – Restaurants located in areas prone to natural disasters like floods, hurricanes, or earthquakes may have higher insurance costs. Urban locations with higher crime rates may also impact premiums, as insurers consider theft and vandalism risks.

3. Annual Revenue: Higher revenue generally means more customers and greater exposure to risks. As a result, the more revenue a restaurant generates, the higher its insurance premiums may be.

4. Number of Employees: The number of employees impacts the cost of workers’ compensation insurance, as it’s directly tied to payroll. Higher employee counts can increase premiums due to greater potential for on-the-job injuries.

5. Claim History – A restaurant with a history of insurance claims may face higher premiums as insurers consider it a higher risk. Consistently low or no claims history can help keep premiums more affordable.

6. Equipment and Building Value: The cost of property insurance depends on the value of the restaurant’s physical assets. More expensive or specialized equipment, high-end furnishings, and large buildings will require higher coverage amounts, impacting the cost of premiums. Nowadays, we see clients face issues with older building they are leasing, we can help find the property insurance policy you need.

7. Coverage Options and Deductibles: Customizing policies with additional coverages or opting for a lower deductible will affect costs. A higher deductible can lower your monthly premium, while added coverages increase protection but also raise costs.

With so many factors to consider and types of coverage, you can see how the cost can vary. Tagrisk Insurance Services will offer plans that are the best value and will continue to annually help you reduce rates while making sure your business is protected. We have pay as you go plans to help you manage the costs.

Sincerely, 

Larry Anaya 

EVP & Partner, Tagrisk Insurance Services